Business Report „The trend is our friend“

Digitalisation of Banking

The trend is our friend.

We are globally moving through a period of fundamental change: the digital transforma足 tion of society. CREALOGIX identified this transition and the trends at an early stage and adapted its strategy accordingly.

We have the competencies to successfully lead the journey of our customers around the globe into the digital future.

crealogix.com/ report-en

Annual results 2013/2014

Highlights.

>20 %

EBITDA

Capacity

1.7

Investments in development and differentiation of CREALOGIX products

CHF

+16

+ 23 %

+ 40 %

+90

%

FY12 / 13

%

Licence royalties

+ 11 %

FY11 / 12

million

FY13 / 14

New licence sales since 1. July 2011

Licences acquired

282

Net cash flow CHF

5.3

Employees

million

FY13 / 14

282

FY12 / 13

256

FY11 / 12

220

Revenue

CHF

50.1

million

27 %

21 % 19 %

27

%

FY11 / 12

FY12 / 13

FY13 / 14

International share of sales outside of Switzerland

Internationalisation

A note from the CEO.

Digital transformation is on every management agenda – worldwide and across every sector.

A development that aligns to CREALOGIX’s portfolio.

Our software products and solutions meet the current and future requirements of the financial industry. As the “Leader for the Digital Bank” we are standing at the dawn of a new era. Our inter­national expansion prepares the foundation for the continued growth of our company and also reinforces our position in our domestic markets.

Bruno Richle Chairman of the Board of Directors and CEO

CREALOGIX is on an international growth path.

The trend is our friend.

Altimeter Group.

Digital Trans­ formation Survey, 2014

Just under 90 per cent of all companies are looking towards a digital change. This was the conclusion reached by a recently published study. It shows that the digitalisation of everyday life has long since started. This changes business processes, enables new business models and impacts entire industries.

The music industry, the media sector and the photo business have already undergone fundamental changes – as well as the financial industry.

Signs of the times. crealogix.com/ report-en

During the past twelve months CREALOGIX also experienced this development. Further­ more, to its benefit. Thanks to its innovative offerings for digital banking, e-payment and e-learning, in 2013/2014 the group improved its annual sales from 49.3 million

+ 16.3

%

The sales from new licences and maintenance was 16.3 per cent higher than the previous year.

to 50.1 million Swiss Francs. The licensing business increased by 16.3 per cent over the previous year. It has been expanded with significant new mandates from Switzer­ land, Europe and the Asia-Pacific region (APAC).

CREALOGIX “The Leader for the Digital Bank”

New business models and processes.

The digitalisation of the private and commercial environment will continue indefinitely.

Companies around the globe will use the new technologies to offer their customers, employees and other business partners more streamlined, convenient and efficient processes. The concentration on the Customer Journey will certainly also lead to new business models.

Digital banking already on track.

There is barely a bank out there that is not reconsidering its business model. Shrinking margins, increasing mobility, changing customer behaviour and constant regulation

ebanking. crealogix.com

changes play a significant role in this respect. A development that CREALOGIX antic­ ipated in its digital banking strategy and for which it already offers a newly launched portal platform, a modular, tried and tested solution. In the direct bank environment, our continuously developed e-banking suite is a coveted solution that focuses on the German market. Moreover, great importance is currently also ascribed to digital con­ sulting in financial issues, where CREALOGIX provides a premium solution in online advisory. Together with the latest security products, which have been audited by external specialists, CREALOGIX already provides the solution for the digital bank of the future.

New impetus in digital payment transactions.

The influence of digital transformation is also changing the method of payment. New technologies and cloud solutions are leading to innovative offers. CREALOGIX is focused on payment transactions and is continuing to expand its offerings for banks, companies and associations in line with the general trend. For example, CLX.Nova is also provided as SaaS (Software as a Service). As a technology partner of Qontis AG, CREALOGIX strengthened its position in Personal Finance Management (PFM) in the Swiss market.

nova. crealogix.com

Customer Perspective Change in customer behaviour and consumerisation of technology

Banking Business Model Banking business model under pressure by margin erosion and disruptive innovations

BANKS

CREALOGIX

need to keep up the pace and change

Enabler for the digital banking strategy

CREALOGIX is the leader for digital banking solutions

Market Perspective Digital Banking considered hottest issue and becoming priority investment focus

Learning independently of place and time. crealogix.com/ education

Even learning is constantly becoming more digital. In many educational institutions, these days, you are more likely to find a tablet than books. Entertaining and mobile offerings also allow companies to provide new motivation when training and develop­ ing their employees. CREALOGIX’s wide range of offerings covers almost every area.

The most recent development is the linking of e-banking and e-learning. A response to the banks’ training obligation towards its customers.

Digitalisation speaks for CREALOGIX.

crealogix.com/ report-en

CREALOGIX is at the pole position thanks to the internationalisation measures and investments introduced in the past three years. The success with the digital banking offerings in the domestic market is also helping the group break through on the inter­ national stage. Its expertise means that CREALOGIX has the necessary competencies to support companies in their digital transformation. After all, this transition is in full swing and no company will be able to oppose it. CREALOGIX will benefit from this.

The Swiss “Enabler for the Digital Banking Strategy” has opened up new horizons both geographically as well as economically.

77%

77 percent of bank customers in the UK use online or mobile banking at least once a month.

Source: BBA, The Way We Bank, 2014

14.7

million

To date, in excess of 14.7 million banking apps have been downloaded in the UK. Source: BBA, The Way We Bank, 2014

60% According to Gartner, 60 percent of all bank transactions worldwide will be processed via a cloud in 2016.

Source: Gartner, Top Industries Predicts, 2014

“The Leader for the Digital Bank”.

The financial industry is faced with a structural change worldwide, which will promote the contin­ ued digitalisation of the banking business. As a leading solution provider for digital banking with initial large international projects and the start of expansion in growth markets, CREALOGIX has reached a milestone in the company’s global development.

The signs point to change.

Retail and private banking as well as asset managers around the globe are being con­ fronted with fundamental changes. The progressive mobility of the customer base, their

ebanking. crealogix.com

desire for everything to be available at all times, and the generational change from old to new money require new services and offers. Regulatory measures are increasing under the influence of FATCA, MiFID II and the full tax transparency required by the OECD. Margins continue to erode.

Right solution at the right time.

It’s no surprise that 80 per cent of banks are currently questioning their organisational structure. At the same time, new providers are emerging and are forcing their way into the traditional value chain with new business models. The financial institutions seem to recognise the signs of the times. Almost nine out of every ten bank managers surveyed around the world are of the opinion that the time for innovation is at hand.

And they are prepared to invest.

PwC, Retail Banking 2020 Report, 2014

To increase customer value.

CREALOGIX is ready for the digital bank of the next generation. It is the most compre­ hensive platform for digital banking across all channels. It combines state-of-the-art internet banking with proactive client management modules. The portfolio of advanced modules covers all functionalities that retail and private banks as well as asset managers require to ensure a seamless offer. CREALOGIX offers a tried-and-tested solution for cooperative asset management between the customer and the advisor.

The edge in security.

CREALOGIX also has the answer to the fact that 71 per cent of the bank CEOs surveyed view cyber crime as the greatest insecurity in their business. CREALOGIX combines forensic measures with the latest authentication methods and integrates additional www.ethz.ch

security measures with external components. CLX.MobileSecurity, developed in cooperation with the Swiss Federal Institute of Technology in Zurich and the CN Lab,

www.cnlab.ch

ensures security on mobile devices.

Already in use.

The current CREALOGIX offering for digital banks is tried and tested and docks with a range of back-office solutions. The open portal architecture is scalable and enables the integration of external products. More than ten products are already implemented at national and international banks. CLX.E-Banking 2.0 can be adapted to every bank’s strategy and is ready for use almost immediately.

The next stage.

In order to support the digital transformation of banks worldwide, CREALOGIX is now also represented in Singapore, London and Vienna. The development of the digital banking offer is focused on the portal and advisor functions as well as the cloud and partner capabilities. A combination of digital banking and digital learning will be introduced to the market shortly as a result of the new statutory duty of financial institutions to provide vocational training. CREALOGIX, as a “The Leader for the Digital Bank”, is a step ahead.

3

x

According to Gartner, the global volume of payments processed via mobile banking will be three times higher in 2017 than in 2013.

Source: Gartner / Statista, 2014

90 90 percent of the mobile data transfer volume will be generated via software as a service (SaaS) and cloud ­based business applications in 2018.

Source: Cisco VNI Mobile, 2014

%

New impetus in digital payment transactions.

Software as a Service (SaaS) and cloud applications will shape the payment transactions of the future.

CREALOGIX has developed these segments. As a strong banking partner, it is already working on solutions that meet the upcoming international standards and requirements. The focus remains the same at CREALOGIX: maximum security re­ quirements that at least equal security in the e-banking sector. nova.crealogix.com

CLX.Nova, the new generation of financial software, is CREALOGIX’s logical response to the trends in cross-platform and mobile business applications. Its multi-bank con­ nection means that it meets the requirements of companies and associations for pay­ ment transactions and is available as a cost-effective Software as a Service (SaaS) solution. The feedback has been extremely positive and promising. This opens another window of opportunity for CREALOGIX in this segment, as mobile payment and SaaS offers are on the move worldwide.

crealogix.com/ e-payment

CREALOGIX has also been a technology leader in digital payment transactions in Switzerland for many years. Its slip scanners are the most popular tools in Swiss offices and the CLX.FTX communication module is in high demand from software partners.

In this role, the specialists are already turning their attention to the new data formats in payment transactions, ISO 20022, SEPA and the transmission protocol EBICS. Also in the pipeline is the next generation of slip scanners, which, in future, will be able to record the QR codes used on the new Swiss standard payment slip.

This consistent forward-looking strategy will ensure that CREALOGIX remains a strong partner in payment transactions and financial management for companies and banks.

New way of learning in the digital age.

Digitalisation has had a huge impact on education and learning. Educational institutions and companies are taking advantage of the benefits of education and training irrespective of time and location. The linking of e-learning and e-banking is the key to financial literacy in the banking world.

A total of 45 000 students and instructors from over 4 000 companies: this is the current number of users in the CREALOGIX cloud based time2learn education plat­

crealogix.com/ education

form. CLX.Evento and CLX.Planer provide welcome support for efficiency increase and performance improvement in campus management for colleges and universities.

Following an impressive start, the digital transformation is now constantly moving forward for education and training. The desire for mobility, increased efficiency in education and a new way of learning, made possible by technology, are rapidly driving its development. Entertaining and social learning are setting new standards and are increasing motivation.

Banks are being confronted by the increasing financial competence of their customers.

CREALOGIX has taken on this task, equipped with expertise in e-learning and dig­ ital banking. It discussed how the banking sector will be able to efficiently meet its financial literacy and compliance obligations in an impressive presentation to a broad range of international industry professionals at the “Fintech” event “Finovate Spring” 2014. Internet or mobile apps allow banks to load interactive e-learning modules as part of a secure session.

finovate.com

+500

%

According to Gartner, the market for mobile and e-learning will grow globally by 500 percent between 2014 and 2020.

Source: Gartner / Statista, 2014

+23

%

The e-learning market will increase annually by 23 percent by 2017 and will thus see the strongest growth in the entire training sector.

Source: IBIS Capital, Global e-Learning Investment Review, 2013

CREALOGIX worldwide

At your doorstep.

Great Britain CREALOGIX UK LTD 68 Lombard Street London, EC3V 9LJ

Austria

CREALOGIX MBA LTD

CREALOGIX (Austria) GmbH

Staple House, Staple Gardens

Herrengasse 1

Winchester, SO23 8SR

1010 Vienna

Singapore CREALOGIX PTE. LTD. 80 Raffles Place Level 35 UOB Plaza 1 Singapore 048624 Switzerland CREALOGIX AG Baslerstrasse 60 8048 Zurich

Germany

Länggassstrasse 7

CREALOGIX (Deutschland) AG

3012 Bern Rosengartenstrasse 6 8608 Bubikon

Breitscheidstrasse 10 70174 Stuttgart Kapuzinerstrasse 7a 80337 Munich

CREALOGIX Holding AG Headquarters Baslerstrasse 60 8048 Zurich crealogix.com

The Leader for the Digital Bank.

crealogix.com