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Ivan Martin CEO Misys Banking Division
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Agenda

• Misys Banking Division Strategy Ivan Martin
• Business Drivers Steve Gowers
• Product Management Jerry Luckett
• Break
• Three Great Stories
• SummitFT Georges Bory
• MidasPlus Andrew White
• EquationPlus Andrew Derrer
• Summary Ivan Martin
• Questions and Answers All

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Key messages
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What did we see in 2002?
In 2002 you told me
Products are old legacy back office systems
Losing market share to competitors
We see no product roadmap for the future
There is a risk the business will not
benefit from a recovery in spending
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What did we see in 2002?
Banking Division ILF
150
100
Revenue m
50
- ILF moving annual total - Smoothed ILF trend
line
1996
1998
2002
2000
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What did we do?
Columbus
Services
RD investment
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Banking software market
Significant opportunities in target markets
Securities
US Retail
Asset Mgmt
Treasury
International Retail
Corporate
Addressable market gt 5bn
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Misys Banking Division
Healthcare Systems Division
Financial Services Division
Banking Division
Misys Retail Banking
Summit Systems
Misys Risk Management Systems
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What did we do?
Columbus
Services
RD investment
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Misys and Banking Systems Market
Over 100 bn
Asset size of Bank
Below 5 bn
Boxes represent market coverage not size of
business
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What did we do?
Columbus
Services
RD investment
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What did we do?
Columbus
Services
RD investment
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Product management
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What did we do?
Columbus
Services
RD investment
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What did we do?
Columbus
Services
RD investment
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RD
(,000)
RD Man Days
140
Front-office
100
55
Technology
60
20
Back-office
0
2003/4
2006/7
Increasing offshore capacity
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Banking market conditions

• Banking software markets are generally improving
• Conditions vary significantly between sectors
• Retail banking continues to show sustained growth
• Wholesale banking and capital markets have
  stabilised
• Marked regional differences activity in emerging
  markets
• Underlying market drivers still apply
• Cost containment
• Regulation
• Rising consumer expectations
• Long term trends continue
• Move away from in-house software to third party
  packages

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Market structure - banking software revenues
Source 2002 financial statements Misys
estimates
Source Annual Reports and Private Company
estimates.
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Global power local knowledge
Auckland Bahrain Bangalore Bangkok Beijing Brusse
ls Dubai Dublin Frankfurt Hong Kong Jakarta
Joburg Kuala Lumpur Lisbon London
Luxbourg Madrid Manila Mexico Miami Milan
Moscow Munich New York Paris Riga Sao
Paolo Seattle Singapore Slough Sofia Sydney
Tokyo Utrecht Warsaw White Plains Zurich
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Achievements in 2004

Portfolio moved to new areas of growth

Increased investment in RD
Retail benefiting from market facing structure


Increased Treasury Capital Markets market share

Strong evidence of traction in our installed base
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Achievements in 2004

Best increase in H2 order intake in 3 years

Closing order book up strongly
Maintenance revenues stable


H2 professional services grew by 20

Professional Services backlog grew by greater
than 70
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Business Drivers Steve Gowers Business
Development Director Misys Banking Division
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Misys focus

• Misys is focused on providing business critical
  systems in specialist vertical markets
• Characteristics of vertical markets
• Depth of industry knowledge
• Depth of software IPR
• Specialist skills able to rapidly deliver
  solutions
• Demand for mature and proven systems
• Long lead times
• Different drivers from horizontal markets (e.g.
  ERP)

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How do vendors compete in vertical markets?
What drives growth in vertical markets?
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How do vendors compete in vertical markets?
What drives growth in vertical markets?
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Competitive dynamics in vertical markets
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Breadth of product portfolio
Over 100 bn
Asset size of Bank
Below 5 bn
Boxes represent market coverage not size of
business
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Depth of IPR

• MidasPlus
• Midas represents 14 million lines of code in
  total, with 168 functional modules
• MidasPlus release was 3 years in the making,
  delivering 3 million lines of new software
• IAS Compliance was 50 man years of investment
• SummitFT
• Summit represents 6 million lines of code in
  total
• SummitFT release was 3 years in the making
• SummitFT and MUST alone represent an investment
  of over 75 man years

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Size and quality of development
2,600 specialist staff
Support
FA
Services
Sales and Marketing
Software Development
Product Management
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Breadth and depth of network
Auckland Bahrain Bangalore Bangkok Beijing Brusse
ls Dubai Dublin Frankfurt Hong Kong Jakarta
Joburg Kuala Lumpur Lisbon London
Luxbourg Madrid Manila Mexico Miami Milan
Moscow Munich New York Paris Riga Sao
Paolo Seattle Singapore Slough Sofia Sydney
Tokyo Utrecht Warsaw White Plains Zurich
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Ability to sell into installed base

• 3 Core systems
• Midas 450 Wholesale and international banks
• Equation 270 Retail banks
• BankMaster 190 Retail and Universal banks
• 4 Departmental solutions
• Summit 110 treasury capital markets operations
• Opics 130 treasury departments
• GMS 800 banks, funds and corporates
• Loan I/Q 30 banks
• Enterprise Risk
• Risk Vision 30 banks

Count is number of discrete Banks Total more
than 1400 customers because many clients have
multiple systems
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Ability to sell into installed base
Contracts signed in FY03/04
Upgrades/Extensions
Funded dev/Other
Additional volume
New customer
New product
Analysis based on numbers of contracts
37
How do vendors compete in vertical markets?
What drives growth in vertical markets?
38
Drivers of growth in vertical markets
39
Growth drivers technology cycles
IT Spending Cycles
Mini- computers
Euro and Y2K
Client- Server
Services Oriented Architecture
ISVs
Source Bureau of Economic Affairs
40
Growth drivers underlying volume
Transaction Volumes
2,007,551,750 messages
2.0 billion 1.8 billion 1.6 billion 1.4
billion 1.2 billion 1.0 billion 0.8 billion 0.6
billion 0.4 billion
1994
1998
1996
2000
2004
2002
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Growth drivers underlying volume
Global FX Volumes 1.4 trillion per day
1.50 trillion 1.25 trillion 1.00
trillion 0.75 trillion 0.50 trillion 0.25
trillion
1994
1998
1996
2000
2004
2002
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Growth drivers regulation/reporting
Simple Lightly Regulated Old Boy Network
Complex Highly Regulated Performance Culture
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Growth drivers competitive advantage
88 of CIOs
70 of Customers
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Growth drivers quality imperative
Fails/Million
1
3K
50K
100K
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Growth drivers shift to third-parties
Fails/ Million
Bank IT budget allocation
Source Celent IT Spending Europe 2004
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The new era and Misys
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Product Management and Development
Process Jerry Luckett Product and Strategy
Director Misys Wholesale Banking Systems
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Product management objectives
Target Market
Market Requirements
Solutions to Meet Requirements
Internal Return
Resource Allocation
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Product management process
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Customer involvement
Strategic Development Partnerships
Customer Advisory Boards
Funded Development
Market Research
User Groups
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Development process
Quality Management Development Process
Development Standards Quality Plan Quality
Audit BMS / ISO Accreditation
Configuration Management Doc Set Mgmt Version
Control Collection Packaging Shipping Dev
Schedule Dev Facility Client Inventory
Project Management Dev Plan Test Plan
Deployment Plan Dev Tracking
Requirements Definition
System Specification
Design
Construct
Integration Test
Quality Assurance
Controlled Deployment
Ongoing Fix
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The move to offshore and outsourcing

• Misys has been creating offshore capacity for
  more than a decade
• What we gain from offshoring
• Lower unit costs
• Increased capacity
• 24 hour development capability
• Access to wider skill pool
• Significant local market presence
• In addition outsourcing also provides a variable
  cost model

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Moving to offshore cost base
2004

• Getting It Right!
• Have an ambition, know your target
• Plan offshore/onshore mix
• You are moving, your customers are not
• Inject product skills through secondment
• Recruit and train
• Protect domain knowledge realignment strategy
• Excellent communications

2007
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Summary

• Know what you want to build
• Get the software factory working effectively and
  efficiently
• Result
• Focus on growth products and new markets
• Output that meets and exceeds industry quality
  standards
• Increase development capacity without increasing
  the RD to revenue ratio

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SummitFT Georges Bory Managing Director Summit
Systems
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Summit a brief introduction

• Product
• Treasury Capital markets solution 400 staff in
  8 countries world-wide
• 110 global customers
• Consistent management and technology strategy
• Loyal customer base

• Resources
• Core development in NY Paris
• Outsourcing partner
• Support and local development
• New York, Paris, London, Frankfurt, Singapore,
  Seoul, Tokyo
• Sales global resource

• Target Markets
• Primarily Tier 2 3 banks
• Some Tier 1
• ASP solution for Tier 4 / corporates

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Summit solution
Derivatives
One Solution front-to-back covering multiple
asset classes
Breadth Depth of functionality No. 1
Modular Technology that grows with clients needs
Market leading tool for exotics structured
products
Technological advantages - .NET and real time
services
ASP
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Multi-asset class coverage

• Exotics Structured (MUST)

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Product evolution
14 Years Track Record
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Investing ahead of the curve

• Increased RD during downturn
• Ready with market leading technology for upturn
• Followed a consistent product strategy and vision
• Employed and retained product development and
  product marketing expertise
• 54,000 RD man days over 5 years

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Client examples
Global Investment Banks
International Wholesale Banks
Regional Large Local Banks
Hedge Funds/Corporates
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Our customers speak for us
Our decision to pool all applications into one
with Summit as the BLB core solution for
investment banking, will help us achieve this
goal. Replacing such a large number of systems
will reduce costs in many areas by reducing
system complexity and improving STP.
The processing and managing of trades will be
massively improved with Summit and I expect to
see a quick return on our investment.
I was impressed by Summits product knowledge and
the capability of its solution. It will provide
us with flexible pricing, integrated risk
management and back-office tools that will enable
us to establish and grow our business in this
competitive and profitable market.
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Market trends
Banks are looking to consolidate vendors
ISDA has estimated that the credit derivatives
market has doubled for each of the last six years
- 3.58 trillion by the end of 2003 with 51
growth expected in 2004
Treasury technology spend is now starting to see
strong signs of recovery and positive growth
rates, and Datamonitor predicts CAGRs of 3.2 and
2.9 from 2002 to 2006 in Europe and the US
respectively.
the deadline for IAS39 compliance, together with
overall pressures to centralize treasury
technology in order to improve operational
efficiency, is going to drive significant
increases in year-on-year growth of investment
until 2006 and beyond
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The Summit advantage
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MidasPlus Andrew White CEO Misys Wholesale
Banking Systems
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This is Midas!
Most successful banking software package ever
International branches and regional banks
Unmatched corporate banking capabilities
Global product, local features, local support
Loyal customer base TRUST
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25 years of change
IT Spending Cycles
Mini- computers
Euro and Y2K
Client- Server
ISVs
Source Bureau of Economic Affairs
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Change again. Banks are under pressure.
Competition markets, products, price
Risk
Regulation
Manual operations
Rocketing customer expectations
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Next phase
IT Spending Cycles
Mini- computers
Euro and Y2K
Client- Server
Services Oriented Architecture
ISVs
Source Bureau of Economic Affairs
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This is MidasPlus!
Open architecture
Global processing
Straight Through Processing (STP)
Head office solution
Multi-channel eServices platform
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MidasPlus A whole new world
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Deep functionality
Tightly integrated yet flexible
Improved functionality
Customer self service
Strong support
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Modern technology platform
Deployment options
Open
Efficient
Development tools
Faster time to market
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Delivering global processing solutions
The Power of One
Improved customer service
Cost and credit control
Reduced risk
Agility
Cross-selling opportunities
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Roadmap more to come!
25 Years Track Record
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The MidasPlus effect
Single biggest investment in Midas, ever
Three years in the making
Delivered on schedule
15 deliveries the day MidasPlus was launched
First two customers in production before Dec
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The global processing effect
Banks will each select a single vendor solution
All back offices in a bank will converge
All Midas customers will upgrade over time
Local features and local reporting are musts
Misys is market leader and has first mover
advantage
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Why Misys and Why MidasPlus?
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EquationPlus Andrew Derrer CEO Misys Retail
Banking
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Equation Plus
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Market dynamics

• The largest market with the largest growth
• Retail Banking to Bank Retailing
• Packages will be the norm
• Compliance deadlines
• Islamic Banking

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Installed sites market share
Installed base
Source IBS Market Report International Retail
Core Banking Software Market. Excludes North
America
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Addressing the market need
Channel
Teller
Electronic
B2B2C
Merchandising
Process
Differentiation
Transactional
Complex
Experience
Product
Efficiency
Deposit/Loans
Investment
Wealth management
Data
Knowledge
Transactional
Customer-centric
Real-time analytical
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The challenge

• Delivering packaged software and related services
  to help financial institutions
• Improve customer service
• Comply with regulatory requirements
• Reduce IT costs

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EquationPlus
Channels
Branch Channels
Internet Banking
Call Centre
IVR
Customer Sales Service
B2B2C
ATM
POS
Mobile Kiosk
Offline
Channel platform
Process
Business Process
Workflow
Rules
Data Propagation Management
Product
Reporting
Consumer Banking
Commercial Banking
Treasury
Analytics
Customer Services
Other Banking Services
Data
Misys Retail Banking Database
Interfaces
Product/ Transaction
General Ledger
Consolidated Information
3rd Party Information
Open technology
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The roadmap
Merchandising
Differentiation
Efficiency
Knowledge
Based on calendar year
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The execution

• What convinces us that we can execute on the
  milestones?
• Experience - MidasPlus
• Partnerships
• Unique tools and utilities
• Talent

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Founding principles for customers

• Bring every customer with us
• An attractive future for every Misys Retail
  Banking customer
• Easy, worthwhile upgrades
• Support commitment
• Technologies that meet the aspiration of banks,
  both large and small
• The right architecture
• Inclusive, not silo-based
• Right platforms

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What the market thinks
In migrating to Equation Plus, Misys has unveiled
an expansive vision to combine the best elements
of proven retail banking functionality, with the
capabilities of leading edge architectures.
Equation Plus, a complete new-generation, richly
functional, highly-advanced retail banking
system, will in our assessment, transform
the fragmented retail banking market and
competitive landscape.
If Misys can deliver on this plan, it will mark a
real renaissance for the Equation brand
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Why we will be best in the market?
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Summary Ivan Martin CEO Misys Banking Division
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Growth opportunities

• SummitFT
• Market leading Treasury Capital Markets
  solution
• World class functionality and technology
• Consistent growth up to and including last 3
  years
• MidasPlus
• Most successful banking application ever
• Unmatched depth of corporate banking
  functionality
• Significant 3 year investment in new technology
  platform
• EquationPlus
• World class Retail functionality
• Clear leader in international markets
• First truly open front-to-back Retail solution

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Customer satisfaction
today our customers tell us
Very impressed by the improvement in Equation
Support over the last six months.
If the Customer Satisfaction Survey were to be
repeated now, Misys would see a dramatic
improvement in feedback from its customers.
A most impressive display of solid technical
expertise and great support. Best wishes from a
satisfied customer.
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Market feedback
Our survey indicates that Misys customers are
planning fewer system replacements than users of
other systems The solutions rated more
favourably than other vendors on flexibility and
instrument coverage Misys product position
versus the market remains strong ... with
products perceived as offering above-average
support for banks future needs
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Key messages

1. Banking is a large and growing software market

2. Misys is well positioned to benefit from this
growth
3. Misys leads in functionality and technology


4. Misys is growing its market share in key
markets

5. Retail is key growth sector going forward
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Making things that really matter, work better
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