Financial Market Solutions: Addressing Challenges in th

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Financial Markets: Front Office Philip Enness – Global Solutions Manager, Financial Markets August 2010

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1 – IBV; Assets are deposits, equity and fixed income Significant growth in global assets is expected Beyond the recent crisis, there is an unprecedented opportunity for the financial services industry to intermediate and manage the enormous global growth of capital and creation of wealth. The value of global assets will quadruple reaching $1,264 trillion by 2025.1 2 Building a smarter planet $1,264

Global Financial System is Highly Interconnected : 

Global Financial System is Highly Interconnected Massively interconnected Evolving organically Intersection points increased 14x in 20 years Moves more than $74T around the world each day 25 billion market data messages travel across global trading systems every day 1 – Rethinking the Financial Network, Andrew Haldane, Executive Director, Financial Stability, Bank of England 3 Building a smarter planet

Explosive Growth in Trade & Volumes Continues Focus on Client centricity and Risk are High Priorities : 

Explosive Growth in Trade & Volumes Continues Focus on Client centricity and Risk are High Priorities Trade and volume growth have grown exponentially in the last few years and are forecast to continue to grow at ever faster rates, once economies return to health. Regulatory directives and risk mitigation policies are driving IT spend Source: Aite Group, survey of 30 Global capital markets CIOs, Oct & Nov 2009 Source: NYSE Euronext, Aite Group estimates, April 2009 4 Building a smarter planet

Electronic and Algorithmic Trading Trends : 

Electronic and Algorithmic Trading Trends Use of Electronic Trading is becoming predominant across all asset classes Use of Algorithmic Trading is most common in the U.S., but is growing in all regions and across all asset classes Source:: Aite Group, June 2010 5 Building a smarter planet

Winners will focus on three key imperatives : 

Winners will focus on three key imperatives 6 Building a smarter planet Develop enterprise wide capabilities to enable informed judgment, client- centricity and profitable growth Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency Integrate risk management Develop new intelligence Reinvent the business model

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Required functionality and capabilities 7 Building a smarter planet AutomationVisibilityFlexibilityScalability

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Automation Unified integration framework Qualitative context based decision engine Standardization of inputs and human intervention for dynamic algorithm creation Inherent cross asset and cross market support 8 Building a smarter planet Automation Visibility Flexibility Scalability

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Visibility Strategic guidance control methodology Embedded proactive safety measures Full transparency of actions and decisions 9 Building a smarter planet Automation Visibility Flexibility Scalability

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Flexibility Short implementation time Caters by design for continuously changing needs Easily incorporate existing functionality Unlimited extendibility 10 Building a smarter planet Automation Visibility Flexibility Scalability

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Scalability Ultra fast framework Unmatched performance by parallelization and prioritization Dynamic by nature Embedded self optimizing and healing characteristics 11 Building a smarter planet Automation Visibility Flexibility Scalability

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IBM’s Financial Markets Framework 12 Building a smarter planet IBM’s Financial Markets Framework Automation Flexibility Visibility Scalability

IBM’s approach to the Financial Markets Framework : 

Provide an agnostic framework to support the trading life cycle Enable integration with existing business processes through a flexible infrastructure Innovate to meet the growing market data and trade execution needs Partner with Customers to enhance the Financial Markets Framework Develop an Ecosystem Support Open Standards initiatives IBM’s approach to the Financial Markets Framework 13 Building a smarter planet Automation Visibility Flexibility Scalability

IBM’s Financial Markets Framework : 

IBM’s Financial Markets Framework Market Data Solution High performance market data solution with an attractive cost structure Algorithmic Trading PlatformScalable solution for automated trading Next Generation Trading InfrastructureUltra High Performance transaction infrastructure with superior reliability Market Surveillance and Trade MonitoringHigh performance surveillance and monitoring system to meet changing risk management and compliance needs Settlement Risk ManagementMeasure and monitor risk associated with unsettled trades Securities ProcessingSettlement and Clearing solution with support for Swift and ISO 20022 Exchanges Next-Generation Trading Infrastructure Market Surveillance and Trade Monitoring Settlement Risk Management Buy Side and Sell Side Market Data Solution (FO) Algorithmic Trading Platform (FO) Securities Processing (M/BO) 14 Building a smarter planet Financial Markets Solution

IBM’s Financial Markets Framework : 

IBM’s Financial Markets Framework 15 Building a smarter planet

Deploying IBM Financial Markets Solutions : 

Deploying IBM Financial Markets Solutions 16 Building a smarter planet