Presentation from "The future of Cards and Payments 2008".

1. Strategies for Growth in a
Post SEPA World
Brendan Reilly
Head of Northern Europe
Country Product Management

2. 1 The Environment
2 Deutsche Bank’s Approach
3 Case Studies
4 Questions
Brendan Reilly · 3 July 2008 · page 2

3. "If you are planning for one year, grow rice. If
you are planning for 20 years grow trees. "
- Chinese Proverb
Brendan Reilly · 3 July 2008 · page 3

4. Economic challenges – Transaction Banking
Expenses Revenues
• High fixed costs • Commoditised products
• Legacy technology • Increasing competition
• Labour intensive operations • Pricing compression
• Operational risk • SEPA – changing landscape
• Inflexible product • Seeking value-add products
Brendan Reilly · 3 July 2008 · page 4

5. Banks have a few real options
Market trends put pressure on strategic positioning
High
Outsourcing Cost Reduction
Cost
level
Sharing Insourcing
Low
Low Transaction Volumes High
Brendan Reilly · 3 July 2008 · page 5

6. …resulting in New Business Models
Split between Distribution and Transaction Banks
Distribution
Customer Sales/Service
Bank
Transaction
Bank Customer Sales/Service Product Mgmt Processing Clearing
Client interaction and relationship can be intact
without ownership of full value chain
Brendan Reilly · 3 July 2008 · page 6

7. Market Trends
• Equens wins contract to provide outsourced payments transaction
services to OP Bank Group
• Barclays forms strategic partnership with Deutsche Bank
• HBoS selects Fortis as its prime Euro Partner Bank
• ING and Atos Origin launch a joint offering of end-to-end services
• What isn’t being seen ?
Brendan Reilly · 3 July 2008 · page 7

8. Wholesale Solutions
Partner Banking, White-label & In-Sourcing Business
Business Initiative established in 2004
Established customer base, business relationship with close to 25 international banks
Considerable track record with Implementing White-label and Partner Banking Solutions
Global reach with offices in Frankfurt, London, Singapore and New York
A Product Suite designed to meet requirements of clients from different segments:
White Labelled Infrastructure
Partner Banking
Channels (db-di) Solutions
Brendan Reilly · 3 July 2008 · page 8

9. db-Infrastructure Solutions
Leveraging DB’s significant Investments in Cash Management /
Payments Technology
GMA PRISMA MTNA SEPA CINQ
Funds Cheque
Investigations
Transfer Processing
Customer Messaging Messaging Customer
Processing
5 year vision & investment program
Systems designed & built to include 3rd party partners
White-labelled electronic banking solutions
Scalable operations across the globe
Business Continuity Plans & Systems
Market leading customer service model
Future-proofing payments environment
Brendan Reilly · 3 July 2008 · page 9

10. Case Study #1: European Bank - SEPA Direct Debits
High volume
11 Software Vendors & 1 Bank
Integration Layer being built
Talks already started with another bank for same solution
Natural extension in to SEPA Credit Transfer Processing
Brendan Reilly · 3 July 2008 · page 10

11. SEPA Direct Debit – European Bank
Access Channels
Country Specific EB Access (SAML) Creditors Direct Access
SSO via SAML
db direct Internet db direct Connect
Attended Unattended
Pain008,
Paymul
Conversion &
PRISMA Routing SEPA DD
SEPA
Engine Integration Pre-Authorization
Initiated Recurrent DD Customer DD Files Layer Sanctions Checking
Local back Non-funds Authorization
Pre-Authorization Check
Advance MT103
end Cashflow/Liquidity
Local back
System
end Notifications
Pre-Authorization Check Local back
System
Response end
Local Business Activity Monitor
System
Back-end
Deutsche Bank’s Systems
SEPA Engine of Client
Authorization Check Authorization
(Client’s instance) Booking MT103
Sanctions Checking
Authorization Check Non-funds Authorization
Response
Funds Authorization
Cashflow/Liquidity
Optional:
Fees and Billing Business Activity Monitor
Customer Notifications
Status Fee Deutsche
Bankack
Transaction Download
Central Bank Reporting
Daily Operational Reports
EBA
STEP 2
Brendan Reilly · 3 July 2008 · page 11

12. Case Study #2 : Pan-European Payments Outsourcing
Multi € million contract over 5 years
High volume of high value transactions
Client is challenged by a legacy of ageing technology & employees
Technology & Operational play – leveraging India & other low cost locations
Transformational deal
Brendan Reilly · 3 July 2008 · page 12

13. European Bank - Payment Outsourcing
Static Data Sources Transaction Sources
Bilateral Internet File-based SEPA Internal Insourced
Client Data Bank Data SWIFT
Agreements Banking system Instruments Applications Clients
Integration Layer
Bank Repository File Transfer
Dedicated SWIFT
(CAAA) (db-direct connect /
line (GMA)
SWIFTNet FileAct)
Middleware
Transactions (PRISMA)
Static Data
High Value & SEPA Payment Processing Platforms
(MTNA & SEPA Engine)
Brendan Reilly · 3 July 2008 · page 13

14. Questions
Brendan Reilly · 3 July 2008 · page 14