Alnova Financial Solutions

The Direct Route to High Performance in Banking

TM

Alnova Financial Solutions delivers high performance by industrializing banking operations

Seizing the initiative in banking...

Banks today are under greater pressure than ever to achieve high performance. This means reducing their cost base while simultaneously increasing their customer focus. The challenge is to improve service delivery and market responsiveness, but with no loss of operational agility. Simultaneously achieving these apparently conflicting objectives at the same time is not easy. Put simply, how can banks cut costs without damaging their capabilities and future growth potential? Accentures experience and research into the attributes that drive high performance in banking confirm that the most effective route to achieving these goals is to industrialize banking operations.

...through industrialization
In Accentures view, banks that successfully industrialize their operations will be positioned to be tomorrows highperformance businesses. And although these winning banks will have widely differing strategic objectives, they will each share three core characteristics. First, they will be more differentiated on the outside than their competitors. To pull ahead of the competition and maintain their lead, banks must formulate and execute a distinctive strategy that differentiates them in the eyes of their customers. Whether this differentiation is created by having better products, services or distribution, there has to be something about a high-performance bank that makes it unique in its marketplace. Second, they will be more simplified on the inside in terms of their operating model. Complexity is the enemy of speed and efficiency, and few global industries are as complex as financial services. Banks that succeed in simplifying everythingproducts, processes and systems across the entire organizationwill be well placed to become high performers. Third, they will be outstanding at execution, demonstrating not only higher operational performance but also excellence in the delivery of complex business change. Leading financial institutions understand the absolute need to prioritize execution as a core capability. This means achieving excellence in executing business processes as well as in planning and managing investments and change programs across the organization. Accenture believes that the next generation of high-performance banks will be industrializedmeaning they will be defined and driven by these three core characteristics. As a result, they will be able to reduce costs without damaging their future growth potential. The question for many banks is how to make the transition to industrialized banking. Accenture has an answer.

Alnova Financial Solutions: Supporting high performance through industrialization

Alnova Financial SolutionsTMwhich is owned by Alnova Technologies Corporation, S.L., a subsidiary of Accentureis Accentures core banking solution that enables banks to drive their own destiny and navigate their journey to high performance. Alnova Financial Solutions helps banks achieve high performance by giving them a clear, comprehensive and direct route to the industrialized banking operations of the future. This route has been tested and proven by well over a hundred banks in more than 20 countries, some of them servicing more than 10 million customers each. These banks are now achieving clear benefits in terms of business results. At the same time, Accentures global reach, technological expertise and deep industry knowledge have enabled successful execution of Alnova Financial Solutions implementation projects. What is Alnova Financial Solutions? Alnova Financial Solutions is a modular core banking solution that supports real-time processing, integrated channel delivery and customer relationship management. Developed for banks that want more than an off-the-shelf solution, it is one of the most complete technology platform solutions available and is designed to help embed the most efficient way of running banking operations. To achieve this, Alnova Financial Solutions is implemented by Accenture. By working with Accenture, each client gains a tailored, state-of-the-art solution that supports process-driven transformation of its operations, opening the way for it to become an industrialized, high-performance bank through a manageable, phased approach. Whether the transformation is total or modular, Alnova Financial Solutions provides the foundation for a clear and executable road map that allows the bank to gain greater operational agility while evolving at its own pace and at a competitive total cost of ownership (TCO). Driving business results The benefits delivered by Alnova Financial Solutions are underpinned by its unique combination of features and capabilities. Covering the full spectrum of universal banking needs, it is a highly integrated solution offering browser-based and smart-client application options to achieve seamless coordination across multiple delivery channels. We have already said that Alnova Financial Solutions embeds the most efficient way of running a bank. But what does this mean in terms of performance figures? Accentures experience shows that Alnova Financial Solutions can help banks achieve competitive cost-efficiency ratios: major clients today are averaging percentages in the low-to-mid 40s. The accompanying information panel describes some case studies of business outcomes delivered.

Providing key features Taken together, these proven capabilities and outcomes position Alnova Financial Solutions as an industry-leading, endto-end and reusable core banking solution that performs servicing and manufacturing with scale efficiency. Alnova Financial Solutions: Is an evolving asset (see information panel on innovation). Examples of innovations include applying serviceoriented architecture (SOA) and business process management (BPM) techniques through an ongoing series of releases to become the core of a process-centric banking solution based on the Accenture model of a high-performance bank. Provides a comprehensive front-end

solution based on a powerful multichannel architecture, industrializing the sales process while enabling the bank to offer its customers a seamless experience across all channels. It also offers comprehensive, SOA-based banking functionality for integration into portals and third-party front ends. Encompasses a dedicated banking customer relationship management solution that allows the bank to identify and focus on the needs of discrete client segments. Uses a core reference version with localization and functional delivery accelerators to support clients varying strategies, requirements and business models. Offers predictable, progressive implementation processes that align

the IT transformation with the operational model by applying Accentures expertise in banking industry and systems integration projects. Benefits from Accentures proven systems integration methods, tools and acceleratorsand from access to the Accenture Global Delivery Network. This differentiated capability helps the client bank realize both project and operational cost advantages without the heightened geographic risk associated with using a purely offshore-based systems integration provider.

Alnova Financial Solutions can help banks achieve competitive costefficiency ratios.

Figure 1: How Alnova Financial Solutions application architecture helps industrialize banking operations

Mobile PDA Kiosk Call Center Brochures Internet Banking ATM POS Multichannel Architecture

Differentiation
Information Center Analytical CRM M&S Core Functionality Expanding Functionality Capital Markets Leasing Factoring & Confirming Trade Finance Factories Insurance Mutual Funds Securities Pension Plans External Services Central Bank External Institutions General Ledger Risk Management Corporate Data Operational CRM Customer Information System Integration Rules Institutional Relationship Automatic Clearing House SWIFT

Simplification

Deposits Lending Payments

Collateral Management

Cards

Execution Mastery

Resource Planning Product Factory

Fees Factory

Operational Management = Third-party software within alliance network Printing Mailing Reporting Document Management

Creating proven competitive edge Alnova Financial Solutions unites and leverages all these features via an integrated, consistent solution specifically tailored to the banks unique needs, enabling it to move at its own pace toward the industrialized model that drives high performance. Alnova Financial Solutions achieves this by harnessing three key advantages: 1. State-of-the-art, industry-specific technologyAlnova Financial Solutions has always been regarded as a state-of-the-art solution. Since its inception 15 years ago, it has been revolutionary in facilitating customercentricity and using layered technical architecture, among other innovations. Now it is evolving into a processcentric solution that enables banks to keep pace with internal priorities and external market demands. Alnova

Financial Solutions uses proven industry processes, frameworks and reference catalogues provided together with the software, while also capitalizing on ongoing technical innovations as they emerge, such as BPM and SOA. 2. A unique combination of flexibility and controlAlnova Financial Solutions delivers business services and business processes that can be integrated flexibly with legacy solutions. This flexibility means that implementations can range from enterprisewide transformation programs to more focused, step-bystep change projects. Alnova Financial Solutions empowers the bank to control its own development and business direction by tailoring the solution to fit its environment at a competitive and controllable TCO. To maximize this flexibility, source code is provided to client banks to help them integrate applica-

tions and processes as efficiently and effectively as possible. The resulting blend of flexibility and control opens the way to pervasive business benefits, including: speeding up time-to-market for new products by up to 75 to 80 percent, helping to lower cost/income ratios by several points (which has now been shown to generate an average improvement of 10 to 15 percentage points over five years), and helping the bank achieve faster and more profitable growth thanks to better execution of strategy due to more precise management and control of the business rules.

3. Credibility and predictable outcomesAlnova Financial Solutions is a proven solution that helps banks to achieve predictable outcomes and supports business strategies at minimum risk. Having been used successfully by more than 100 banking industry clients in over 20 countries, Alnova Financial Solutions employs proven functional and technical acceleratorsincluding frameworks, testing kits, and conversion or database toolsto help enable delivery success. By providing a systematic, standardized, robust, flexible and customizable platform, Alnova Financial Solutions also facilitates the integration of newly acquired or greenfield operations and can and can reduce the risk inherent in mergers, acquisitions and international expansion strategies.

Delivering ongoing support and innovations Going forward, Alnova Financial Solutions will continue to offer cuttingedge innovations. Accenture has been leading the way in key areas of banking technology, and our track record of innovation will continue into the future, benefiting Alnova Financial Solutions as well as its new and existing clients.

Alnova Financial Solutions in action: case studies

The flagship banking market where Alnova Financial Solutions initially proved its worth was Spainone of the most priceand cost-competitive markets in Europe. Spain has one of the most efficient banking industries, both in terms of business and IT efficiency (with cost/income ratios in the mid-40s when the European average is the mid-50s). The success of Alnova Financial Solutions in the Spanish banking market springs primarily from three factors: its customer-centric model, intensive use of innovative technology and a high degree of operational standardization. For clients, the benefits realized following implementation include major operational gains and significant reductions in costs. One major Spanish savings bank used Alnova Financial Solutions as the engine for the replacement of its core banking system and for the migration to a new operating model involving process and product transformation, as well as a back-office reengineering project that took business back-office operations staff down to 4 percent of total headcount. As a result, over six years the cost/income ratio plunged from 72.2 percent to 42.6 percent. Another leading international bank has implemented Alnova Financial Solutions as a single multi-country platform to support its international expansion, with a single operating model for Latin American countries and new product development capabilities that reduced time to market by 75 percent to 80 percent. Its six-year cost/income ratio fell from 60.7 percent to 37.9 percent. Following the proven delivery of business benefits among Spanish, UK and Latin American banks, other banks around the world are making increasing use of Alnova Financial Solutions to power their drive toward high performance. Major transformation projects using Alnova Financial Solutions as the core enabler have been executed successfully in many countries, with recent examples including BAWAG P.S.K. (Austria) and PKO Bank Polski (Poland), to name just two.

Alnova Financial Solutions: a track record of innovation

Accenture is committed to Alnova Financial Solutions and its evolution. For 15 years, Alnova Financial Solutions has continuously been providing state-of-the-art functional and technical concepts for banking: A customer-centric, modular solution for banking operations. Technological flexibility. Business applications are isolated from environmental changes. The product factory concept. Products are created and activated in real time, allowing faster product creation through copy-and-paste functionality and enabling a dramatically improved time-to-market. Online and real-time processing. Services can be monitored and systematically improved. Business process automation. Straight-through processing (STP) and other forms of automation help minimize duplicate entries and human intervention. Key developments have included incorporating new technologies such as Microsoft .NET and new concepts such as component-based approaches and multichannel architecture. We have also added new functions and capabilities such as integrating customer relationship management (CRM) intelligence into core banking processes and product applications, ensuring that key commercial CRM attributes such as customer segment and channel or geographical area are embedded throughout the core banking system. As a result, the commercial banking decisions and rules are automatically extended and applied all along the value chain. More recent steps forward have included the systematic incorporation of BPM and SOA.

For 15 years, Alnova Financial Solutions has been providing state-of-the-art functional and technical concepts for banking, and our track record of innovation will continue into the future.

Realizing the benefits of Alnova Financial Solutions

In a banks migration to a more efficient and effective operating model, Alnova Financial Solutions helps it to introduce new processes and functionality to achieve defined business goals. At the same time, Alnova Financial Solutions allows synergies to be identified and realized across the organization. In doing so, Alnova Financial Solutions provides a degree of control, flexibility, integration and operational coherence that we believe is unrivalled by any other solution. Alnova Financial Solutions enables a bank to achieve high standards of efficiency, functional and technical scalability, customer-centricity and commercial productivity. Implementing and customizing Alnova Financial Solutions with Accenture Accenture has the knowledge, experience and assets needed to help banking businesses realize their full potential and achieve high performance. Leveraging the strength of knowledgeable banking and IT transformation people, Alnova Financial Solutions is the result of over 15 years of experience in providing innovative solutions for the banking industry. Accenture Financial Services has more than 2,500 professionals with core banking and Alnova platform expertise to support Alnova Financial Solutions projects. Our professionals work is complemented by nearshore and offshore capabilities at Accenture Delivery Centers in Buenos Aires, Madrid, Manila, Warsaw and elsewhere. Our experienced professionals are specialists in: Program and project management. Banking processes and business architectures. Product development. Product-oriented consulting services. Delivery services: customization, testing, data conversion and more. Technology support and more. Independent commentators confirm Accentures continued global leadership in terms of major systems integration projects. In 2008for the second year in a rowthe respected IT market research firm IDC named Accenture the worldwide leader in systems integration services. The combination of Accenture experience and Alnova Financial Solutions is enabling banking organizations to demonstrate superior business outcomes and sustain their journeys toward high performance. Beginning the journey The customized implementation of Alnova Financial Solutions is helping a significant number of banks to succeed in their respective business strategies and continually demonstrate superior performance. Alnova Financial Solutions puts your bank in control of its own destiny with an industrialized solution tailored to help you with your current needs and strategies for the future. Let Accenture experience help you succeed in making strategies into realities.

Figure 2: Examples of Alnova Financial Solutions value propositions and benefits delivered
Our value proposition... Differentiation
Profitable growth Customer retention

...through...
CRM tools and customer-centric applications Flexible product configuration Customer-oriented evaluation tools Pricing based on segmentation schemes Complete multichannel capabilities

...which provides...

Faster speed-to-market Improved cross-selling ratios Improved quality of service Better customized offers to clients

Simplification
Optimized cost structures Improved resources assignment

High data volumes with maximum scalability Flexible, industrialized M&A and international expansion engine High level of automation Parameterized, customer-oriented processes for back- and front-office scenarios

Scalability: from 100K to +10M customers Cost/income ratio improvements Improvement in commerical productivity Optimized staff distribution: branch and back-office Profitable growth: organic and inorganic growth with controllable headcount increase Improved IT efficiency

Execution Mastery
Business execution
Transformation processes

Single customer experience through all channels Improved financial results and risk exposure due to precise management of business rules Improved credit quality Minimized delivery risk: accelerators, frameworks and predictable outcomes

Improved reputation with clients and investors Maximum availability levels Predictable delivery risk

About Accenture Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 186,000 people in 49 countries, the company generated net revenues of US$23.39 billion for the fiscal year ended Aug. 31, 2008. Its home page is www.accenture.com

Copyright 2008 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Copyright 2008 Alnova Technologies Corporation. All rights reserved. For more information on Alnova Financial Solutions, please visit www.alnovatech.com. Alnova Financial Solutions is a registered trademark and product owned by Alnova Technologies Corporation, an Accenture subsidiary.