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Slide 1: Philip Enness – Global Solutions Manager, Financial Markets August 2010 Financial Markets: Front Office © 2010 IBM Corporation
Slide 2: Building a smarter planet Significant growth in global assets is expected $1,264 The value of global assets will quadruple reaching $1,264 trillion by 2025.1 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. 2 1 – IBV; Assets are deposits, equity and fixed income © 2010 IBM Corporation
Slide 3: Building a smarter planet Global Financial System is Highly Interconnected  Massively interconnected  Evolving organically  Intersection points increased 14x in 20 years Financial institutions Surveillance and monitoring Compliance  Moves more than $74T around the world each day Regulators Soundness Stability Supervisors Laws and rules Standards  25 billion market data messages travel across global trading systems every day Policy makers 3 1 – Rethinking the Financial Network, Andrew Haldane, Executive Director, Financial Stability, Bank of England © 2010 IBM Corporation
Slide 4: Building a smarter planet 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: NYSE Euronext, Aite Group estimates, April 2009 4 Source: Aite Group, survey of 30 Global capital markets CIOs, Oct & Nov 2009 © 2010 IBM Corporation
Slide 5: Building a smarter planet 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 Algorithmic Trading Adoption by Asset Class Global Adoption of Algorithmic Trading United States Europe Asia Equities Futures FX Options Fixed Income 5 Source:: Aite Group, June 2010 © 2010 IBM Corporation
Slide 6: Building a smarter planet Winners will focus on three key imperatives Reinvent the business model Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency Develop new intelligence Develop enterprise wide capabilities to enable informed judgment, clientcentricity and profitable growth Integrate risk management Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns 6 © 2010 IBM Corporation
Slide 7: Building a smarter planet Required functionality and capabilities Automation Visibility Flexibility Scalability 7 © 2010 IBM Corporation
Slide 8: Building a smarter planet 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 Automation Visibility Flexibility Scalability 8 © 2010 IBM Corporation
Slide 9: Building a smarter planet Visibility  Strategic guidance control methodology  Embedded proactive safety measures  Full transparency of actions and decisions Automation Visibility Flexibility Scalability 9 © 2010 IBM Corporation
Slide 10: Building a smarter planet Flexibility  Short implementation time  Caters by design for continuously changing needs  Easily incorporate existing functionality  Unlimited extendibility Automation Visibility Flexibility Scalability 10 © 2010 IBM Corporation
Slide 11: Building a smarter planet Scalability  Ultra fast framework  Unmatched performance by parallelization and prioritization  Dynamic by nature  Embedded self optimizing and healing characteristics Automation Visibility Flexibility Scalability 11 © 2010 IBM Corporation
Slide 12: Building a smarter planet IBM’s Financial Markets Framework Automation Visibility IBM’s Financial Markets Framework Scalability Flexibility 12 © 2010 IBM Corporation
Slide 13: Building a smarter planet 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 13 Automation Visibility Flexibility Scalability © 2010 IBM Corporation
Slide 14: Building a smarter planet IBM’s Financial Markets Framework Financial Markets Solution Buy Side and Sell Side  Market Data Solution (FO)  Algorithmic Trading Platform (FO)  Securities Processing (M/BO) Exchanges  Next-Generation Trading Infrastructure  Market Surveillance and Trade Monitoring  Settlement Risk Management  Market Data Solution High performance market data solution with an attractive cost structure  Algorithmic Trading Platform Scalable solution for automated trading  Next Generation Trading Infrastructure Ultra High Performance transaction infrastructure with superior reliability  Market Surveillance and Trade Monitoring High performance surveillance and monitoring system to meet changing risk management and compliance needs  Settlement Risk Management Measure and monitor risk associated with unsettled trades  Securities Processing Settlement and Clearing solution with support for Swift and ISO 20022 14 © 2010 IBM Corporation
Slide 15: Building a smarter planet IBM’s Financial Markets Framework Market Visualisation External Gateways Internal Gateways Market Data Analytics Source InfoSphere Streams PE Sink Source PE PE PE Sink PE PE Sink PE Market History & Order Book Processing Element Container Informi x Processing Processing Processing Element Element Element Container Container Container InfoSphere Streams Data Fabric TCP-IP Transport - / Ethernet MWLLM Processing Element Container Business Events Monitoring & Reporting Other Apps. 15 Pricing Quoting Risk Trade Execution Hedging © 2009 IBM Corporation © 2010 IBM Corporation
Slide 16: Building a smarter planet Deploying IBM Financial Markets Solutions 16 © 2010 IBM Corporation