1. © 2007IBM Corporation SOA on your terms and our expertise Software IBM WebSphere Transformation Extender Pack for SEPA Version 1.0 Customer Presentation May 29 2007

2. SOA on your terms and our expertise Software What is the Single Euro Payments Area (SEPA)?  It is a regulatory requirement that eliminates the distinction between cross-border and national payments within the European Union  It requires the removal of technical, legal and commercial barriers to enable a single “domestic” payments market for the whole European Area and will significantly improve trade in the Euro zone.  It will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location  This project aims to put an end to fragmentation by introducing, as from 2008, European payment instruments which are going to replace national ones by end-2010. The vision is that by end-2010 all retail payments in euro are carried out as easily, efficiently and safely across Europe as within national borders

3. SOA on your terms and our expertise Software SEPA means new schemes and new processing infrastructures Different methodologies have been adopted for : 1.Credit Transfers and Direct Debits got new Electronic Transfer Schemes (ETS) Key deliverables : SCT and SDD Rulebooks which detail core and basic services to enable a common level of service to users in a predictable timeframe 2.Card payments will get their schemes adapted Key deliverable : SCF states how issuers, acquirers, card schemes and operators must adapt their current operations to comply to SEPA

4. SOA on your terms and our expertise Software SEPA Direct Debit (SDD) Processing cf : Making SEPA a Reality, EPC066-06 version 1.3, page 40 Currently important differences between the countries related to the mandate processing The transposition of the Directive into country law is not completed (impacts cross country DD) The main required changes of the bank’s processes are related to Mandate handling process to be reviewed and evt. rebuilt different schemas might coexist for some time (country focused and cross country) Same clearing and settlement actors as SCT Same changes related to format and schema changes as SCT

5. SOA on your terms and our expertise Software SEPA Credit Transfer (SCT) processing In general no important difference to current transfer processing Not all types of existing credit transfers will be replaced by SCT. The actors need to ensure coexistence of the new with the existing schemas The main required changes of the bank’s processes are related to the coexistence of different schemas the SEPA payments must apply the SEPA schemas new / additional Clearing and Settlement actors are entering the market The format choice given to the customers for issuing their payment orders cf : Making SEPA a Reality, EPC066-06 version 1.3, page 39

6. SOA on your terms and our expertise Software SEPA Cards Framework cf : Making SEPA a Reality, EPC066-06 version 1.3, page 45 The SCF defines a series of high level principles and rules which need to be applied in SEPA Removal of commercial, technical and legal barriers Migration to EMV certified terminals with PIN pads Transparent pricing Fraud prevention …. Because of the technical complexity of the card systems and of the impact of SEPA has on this market (e.g.interchange fees) the definitive solutions to be implemented is still under investigation Belgium and Finland decided to replace national scheme by EAPS (Euro Alliance of Payment Schemes) Cards represent : 12 billion payment transactions and 6 billion cash withdrawal transactions per year done using 350 million cards in the Euro area

7. SOA on your terms and our expertise Software Integration Challenges with SEPA  Transition from legacy systems to SEPA schemes will require significant investment.  Implementation of SEPA solutions across multiple geographies and national systems may lead to consolidation of small banks  SEPA’s data set (ISO 20022, a.k.a. UNIFI) is large, complex, and requires more than basic XML schema handling  SEPA’s rulebooks require not only format level compliance, but message content validation and implementation rule logic  Anticipated changes and updates to the SEPA Schema and Implementation Guidelines introduce risk to bespoke solutions  The breadth and overhead of the ISO 20022 schema, and the need to integrate with existing systems presents processing cost challenges and infrastructure architecture concerns for banks

8. SOA on your terms and our expertise Software Extensive change across all participants  EPC Define schemes and charging conventions Define PEACH framework Define and implement certification procedures  25 National Banking / Payment Associations Decision and timetable / transition on adoption of SEPA-compliant schemes Decision on clearing infrastructures: fold into PEACH, merge, wind down Review legal / contractual frameworks  8,000 Banks Transition to SEPA schemes: standards, operating procedures, access network(s) Account number changes ? Customer education  2 million Corporate customers and government agencies Transition to SEPA schemes: standards, operating procedures Account number changes ? Review banking relationships outside home member state  Service providers, operators, etc Define role and services within and/or outside PEACH Transition to SEPA schemes: standards, operating procedures, access network(s) Account number changes ?  Merchants Changes to terminals

9. SOA on your terms and our expertise Software IBM provides the Industry’s Premiere Solutions for SEPA Implementation SEPA Processor & Validation Product Offerings SEPA Industry Framework Process & Payment Models Integrating & Service Enabling Legacy Payment Systems Industry Knowledge, Expertise and Best Practices

10. SOA on your terms and our expertise Software WebSphere Transformation Extender with the Pack for SEPA can build a foundation for an Enterprise Payments Platform Payment Processes Data Model Based on ISO20022 Enterprise Payments Platform - Enterprise Service Bus - Interfaces for Common Payment Functions Gateway Services WebSphere TX Pre-built Monitoring Tools Transform Services Application Services

11. SOA on your terms and our expertise Software WebSphere Transformation Extender Pack for SEPA For IBM Clients needing to develop their Single Euro Payments Area solution with IBM WebSphere Transformation Extender. SEPA Credit Transfer SEPA Direct Debit SEPA UNIFI Message and Content Validation EPC Implementation Rules Validation SEPA to SWIFT MT 103 Sample SEPA-Domestic converters

12. SOA on your terms and our expertise Software End-to-end message flow and formats - Today Bank S (sending) Customer S (sending) (PE)-ACHBank R (receiving) Customer R (receiving)  Account handling Customer S  Transfer to Bank R (via ACH)  Receive from Bank S (via ACH)  Account handling Customer R  Clearing  Initiate Credit Transfer  Account Info Credit Transfer Alternatively between large banks: Bilateral Clearing DDDFFDDF Domestic Format – country specific – only for in-country traffic FIN Format MT103+ - for EU cross boarder credit transfers PE-ACH : Pan European Automated Clearing House

13. SOA on your terms and our expertise Software Bank S (sending) Customer S (sending) (PE)-ACHBank R (receiving) Customer R (receiving)  Account handling Customer S  Transfer to Bank R (via ACH)  Receive from Bank S (via ACH)  Account handling Customer R  Clearing  Initiate Credit Transfer  Account Info Credit Transfer Alternatively between large banks: Bilateral Clearing SSSSS SEPA Format End-to-end message flow and formats – Final SEPA

14. SOA on your terms and our expertise Software Bank S (sending) Customer S (sending) (PE)-ACHBank R (receiving) Customer R (receiving)  Account handling Customer S  Transfer to Bank R (via ACH)  Receive from Bank S (via ACH)  Account handling Customer R  Clearing  Initiate Credit Transfer  Account Info Credit Transfer Alternatively between large banks: Bilateral Clearing DSDSDSFFDSD S F Domestic Format – country specific – only for in-country traffic SEPA Format FIN Format MT103+ - for EU cross boarder credit transfers End-to-end message flow and formats – Migration phase

15. SOA on your terms and our expertise Software Bank interfaces and processing formats - Today Bank Processing in Domestic Format (existing) Processing in FIN Format and Non-EU (existing) DFDF From PE-ACH Non-EU To PE-ACH Non-EU From Customer ACH other bank To Customer ACH other bank

16. SOA on your terms and our expertise Software Bank interfaces and processing formats – Final SEPA Bank Processing in SEPA Format (new) SS From Customer ACH PE-ACH other Bank To Customer ACH PE-ACH other Bank Non-EU Processing FF From Non-EU To Non-EU

17. SOA on your terms and our expertise Software Bank interfaces and processing formats - Migration Bank SEPA Format -> Domestic Format (country specific) Processing in Domestic Format (existing) Processing in SEPA Format (new) Processing in FIN Format and Non-EU (existing) DSFDSF SD DS FS SF FS DS FS SF Domestic Format (country specific) -> SEPA Format FIN MT103+ Format -> SEPA Format SEPA Format -> FIN MT103+ Format  S->D and S->F outbound not usefull as all banks must be able to receive SEPA.  Inbound and outbound conversions probably differ as different enrichment data available. From PE-ACH Non-EU To PE-ACH Non-EU From Customer ACH From Customer ACH PE-ACH To Customer ACH To Customer ACH PE-ACH

18. SOA on your terms and our expertise Software  Transform, validate, and enrich any document, message or complex data  Deliver trustworthy information for critical business initiatives  Meet regulatory compliance requirements  Codeless development; universal reuse and deployment WebSphere TX: Universal Transformation & Reuse “Make Advanced ESB More Advanced”  Embedded  Standalone  Event driven MAP TRANSFORM Advanced ESB ESB J2EE App. Server Process Server Standalone System z (native) Windows, UNIX, Linux Multi-InMulti-Out

19. SOA on your terms and our expertise Software Design Studio - Map Designer Drag and Drop Mapping No code to write Easily represent complex transformation rules Local & Remote Debugging Runs on Windows

20. SOA on your terms and our expertise Software WTX Design Studio – Type Designer

21. SOA on your terms and our expertise Software Why is WebSphere Transformation Extender the right solution for a SEPA Converter? Natively runs in CICS, IMS and MVS on System Z, & distributed platforms Provides Product-based maintenance updates to the SEPA formats and rules Has massive scalability & throughput, with efficient processing of data Recognized world-leader in financial services transformation Reduce cost, time, and RISK to implement and maintain SEPA compliance into your existing operational infrastructure, now, and in the future. Can be leveraged by Process Server & Message broker implementations Codeless design & customization mean easy linkages with existing systems

22. SOA on your terms and our expertise Software SEPA Validation, Rules Compliance and Processing through WebSphere Transformation Extender  IBM’s Universal Transformation Engine  Thousands of Millions of Transactions and Trillions of Euros are processed by WTX across a variety of industry formats and custom data sets EVERY DAY  Provides SWIFT 15022 and 20022 (Funds) Processing for over 40% of all SWIFT messages worldwide  Can interact natively with Legacy and Service Oriented Systems  Extremely efficient processing lowers infrastructure costs and provides high throughput and scalability

23. SOA on your terms and our expertise Software How to Get Started  IBM QuickStart for WebSphere Transformation Extender  Transforming your payment processing to meet Single Euro Payment Area (SEPA) standards Our experts help you quickly define your transformation requirements and help you begin to develop your mapping specifications. We lead an architectural assessment of your middleware to evaluate the requirements across your system topology.

24. SOA on your terms and our expertise Software Further information  WebSphere Transformation Extender Visit www.ibm.com/software/integration/wtxwww.ibm.com/software/integration/wtx  WebSphere Process Server Visit www.ibm.com/software/integration/wpswww.ibm.com/software/integration/wps  WBI for Financial Networks  http://www.ibm.com/software/integration/wbifn/  IBM Financial Services Solutions  http://www.ibm.com/industries/financialservices/index.jsp  Single Euro Payments Area (SEPA) visit http://www.europeanpaymentscouncil.euhttp://www.europeanpaymentscouncil.eu