Contents:

OUR VIEW 1 CATALYST 1 SUMMARY 1 ANALYSIS 2 Introduction 2 Advisor support tools must integrate and work with back office systems to provide full understanding of customers for all products / portfolios and drive the execution process 2 The relationship manager must combine the personal customer relationship with a complete financial understanding and advisory capability, able to act as the face across entire service range 3 Advisor productivity is achieved through focusing activity on the client and using advisory tools, not in origination, reporting and form filling 4 Rapid time-to-market and product innovation requires both flexibility and transparency of business workflows 4 To achieve flexibility and efficiency new product types (e.g. structured products, alternative investments) require core systems that can deal with product breadth rather than isolated or bolt-on systems 4 Product breadth and innovation demands will stretch the operational cost base unless processes are flexible, automated / IT enabled and controlled 5 Business processes should be constructed around optimum workflows that provide both speed and accuracy, increase customer service and enhance operational efficiency. 6 Enhanced customer service and operational efficiency can both be achieved through focusing on the speed of operational processes 6 Process workflows should not be hard-coded into core, but modeled by the business, with IT providing automation and monitoring as well as workload optimization support 6 Reporting must enhance the customer relationship - flexibility and customization are key, but the reporting process should be automated to focus analyst time on adding value 7 Reporting for both regulators and customers needs to be an integrated, automated process to increase speed, reliability and adaptability 7 IT needs to focus on supporting and aligning business strategy. This requires shifting IT spend towards development, with systems transformation and consolidation vital steps 8 Run-the-bank spend dominates IT budgets; however, best-in-class private banks are focused on development 8 Development should be focused on business objectives, not IT integration and/or process modification 9 Core transformation should bring the benefits of consolidation, driving both operational efficiency and business growth objectives 10 Key take outs 11 Business priorities 11 IT strategy priorities 11 APPENDIX 12 Methodology 12 Further reading 12 Disclaimer 12 List of Figures Figure 1: Brand and service remain top criteria for success, but must be matched with advisory capability and customer understanding 2 Figure 2: Lack of customer understanding and error levels drive customer dissatisfaction 3 Figure 3: Private banks need to increase time-to-market while lowering operational cost base 5 Figure 4: Business process flexibility and desire to consolidate application are key drivers for core renewal 6 Figure 5: Compliance has become key investment growth area, but mandatory spend should support be strategic rather than necessary spend 7 Figure 6: IT spend is focused on core systems, largely around dealing with the maintenance and integration burden starving IT spend for development 9 Figure 7: Legacy core system increase maintenance costs and also drive up development time & expense 10 Figure 8: Legacy core system increase maintenance costs and also drive up development time & expense 10 Figure 9: Best practice IT to meet core demands in Swiss private banking 11