Financial Services

Ashok Vemuri
Vice President and Head – Banking and Capital Markets
Safe Harbor
Certain statements made in this Analyst Meet concerning our future growth prospects are
forward-looking statements, which involve a number of risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking statements. The risks and
uncertainties relating to these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services
including those factors which may affect our cost advantage, wage increases in India, our ability to
attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, industry segment concentration,
our ability to manage our international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks or system failures, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our service contracts, the
success of the companies in which Infosys has made strategic investments, withdrawal of
governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising
capital or acquiring companies outside India, and unauthorized use of our intellectual property and
general economic conditions affecting our industry. Additional risks that could affect our future
operating results are more fully described in our United States Securities and Exchange
Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31,
2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are
available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-
looking statements, including statements contained in the company's filings with the Securities and
Exchange Commission and our reports to shareholders. The company does not undertake to
update any forward-looking statements that may be made from time to time by or on behalf of the
company.

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 2
Agenda

» Introduction to the Financial Services Practice

» Market overview and client imperatives
» Financial Services Strategy
» Industry Expertise
» Risk management
» Solutions and Alliances
» Integrated Outsourcing
» Benefits of our new Strategy
» Q&A

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 3
The financial services industry is the largest end-
user of Infosys’ services

NORTH AMERICA EUROPE ASIA-PACIFIC

Banking and Capital

Markets Europe Financial Asia-Pacific Financial
Insurance & Services Practice Services Practice
Healthcare

Global Accounts

Banking Business Unit (Finacle Banking products)

• Financial Services is the largest contributor to Infosys’ revenues, accounting

for 34% of total revenues
• 74% of Financial Services revenues comes from North America
• The Banking Business Unit develops and markets the Finacle® suite of
banking products and solutions

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 4
It contributes to over a third of company revenues
and has been growing at a CAGR of 39 percent

REVENUE BY INDUSTRY VERTICAL (Q1 05) FINANCIAL SERVICE REVENUE ($ M)

Others
21.7%
CAGR=39%

Retail
11.4%
34.0%
389 416
Financial
Services 283
17.9% 200
Telecom
15.0%

Manufacturin FY 02 FY 03 FY 04 LTM Q1 05
g
KEY METRICS REVENUE PROFILE

Number of active clients : 127 Consulting & Package : 12.8%

Number of large clients* Implementation
$ 30 m+ : 5 ADM : 55.5%
Testing and Re-engg. : 11.8%
$ 5 m+ : 13
Others : 19.9%
Practice Strength : 8,500

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 5
We service the complete spectrum of the
financial services industry…

Banking Capital Markets Diversified Financial Insurance

Retail Banking & Investment

Leasing & Finance Life Insurance
Cards Management

Benefits
Transaction Banking Brokerage Property & Casualty
Administration

Travel Related Insurance

Treasury Advisory Services
Services Brokerage

Corporate & Credit Custody Trust Services Re-Insurance

Depository &
Private Banking Specialty Finance Health Care
Exchanges

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 6
… through a suite of end-to-end business
advisory and execution services
CAPABILITIES
CAPABILITIES SERVICES
SERVICES

• Global Sourcing Strategy

STRATEGIC • Portfolio Rationalization
PLANNING • Benchmarking & Best Practices BUSINESS
CONSULTING

• Org-wide BPR
BUSINESS • Post-Merger Integration
TRANSFORMATION

PROGRAM MANAGEMENT
• Time-To-Market Reduction
ADM &
ENHANCEMENT
• Straight Through Processing
• Claims Process Automation
OPERATIONAL (Paperless office)
EFFICIENCY • Process & System Optimization
• CMM & Six-Sigma Consulting

INFRASTRUCTURE
• Anti-Money Laundering, HIPAA MAINTENANCE
RISK • Trading Compliance
MANAGEMENT & • Basel II
COMPLIANCE • Sarbanes Oxley

• Unified Customer View BUSINESS

CUSTOMER & • Data Management
REVENUE PROCESS
• Pricing Strategy
MANAGEMENT •
OUTSOURCING
Client Reporting

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 7
Market Overview and Client Imperatives

Slide 8
The worldwide financial services industry spends
about $129 billion annually on IT services

Financial Services IT Services –

Key Facts
WORLDWIDE FINANCIAL SERVICES IT SERVICES
SPENDING ($ Billion)  Technology is one of the top 5 business issues
for financial services CEOs
CAGR 154
145  The financial services industry represents the
6.3%
136 largest market for IT Services spending
129
123 worldwide
114
 Financial institutions have been at the forefront
of global sourcing both in technology as well
as in operations
 We are now seeing growth in all segments in
this industry, due to the recovery in the US and
world economy
 Several other drivers are also contributing to
this growth:
» The quest for competitive advantage
» M&A related IT integration
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 » Regulatory mandates (e.g. Patriot Act,
AML, HIPAA, Basel II, etc.)
 The era of buying technical expertise is on
its way out and that of buying business-IT
Source – Gartner expertise is emerging

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 9
Certain mega trends are driving clients strategies and
expectations from service providers - THE NEW GAME
FINANCIAL SERVICES MEGATRENDS
 Improve customer management –
increase cross-sell and reduce churn
 Increased regulatory oversight – focus
on risk management & compliance
 Global Sourcing for competitive
advantage
 Growing global competition and entry of
non-traditional competitors
 Increased complexity and
sophistication of financial products and
services
 Importance of scale leading to industry
consolidation through M&As
 Increased use of technology to deliver
products and services
 Cost reduction though operational
improvement
© Infosys Technologies Limited 2004-2005
CLIENT EXPECTATIONS
 Global sourcing and delivery capability
critical to IT services purchase
– Deep knowledge, not just familiarity, on
their industry vertical and sub-vertical
– Familiarity with market actualities
– Pure low cost strategy by itself is
inadequate
 Expectation of partner size and scale
– Risk Management
– Ability to scale and rapidly
– Potential for strategic partnerships
 Expectation of providing an integrated
operations and technology offering
 Ability to provide industry-focused
solutions rather than plain vanilla
services
Analyst Meet 2004 | New Game. New Rules. Slide 10
Infosys Strategy to meet Client
Expectations

Slide 11
Our strategic response is driven by client
imperatives

CLIENT
CLIENT EXPECTATIONS
EXPECTATIONS OUR
OUR RESPONSE
RESPONSE AND
AND FOCUS
FOCUS 2004
2004++

 Global sourcing critical to IT services  Increase focus on building

purchase domain and process skills
– Deep knowledge, not just familiarity, on
their industry vertical and sub-vertical  Achieve partner-of-choice status
– Pure low cost strategy is inadequate through process innovation to
 Importance of partner size and scale provide low risk and high value
solutions and services
– Risk management
– Ability to scale  Develop industry-focused
– Potential for strategic partnerships services and business solutions
 Need for an integrated operations and internally or through third party
technology offering alliances
 Need for industry-focused solutions
rather than plain vanilla services
 Provide an integrated, end-to-
end, outsourcing service

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 12
We are investing in our people to build depth and
breadth of industry expertise…
OUR
OUR RESPONSE
RESPONSE AND
AND FOCUS
FOCUS 2004+
2004+
 Increase focus on building subject
matter expertise across the
organization
 Achieve partner-of-choice status
through low risk (and high value)
proposition
 Develop industry-focused services
and business solutions internally or
through alliances
 Provide integrated, end-to-end,
outsourcing services
Large Investment Manager & Benefits Administrator
• Conducted classroom training, offsite working programs and brown-bag
lunch sessions to build subject matter expertise
• Problem solving was built into the training programs
• Shared standard industry templates, guidelines, and process highlights
• Also helped build a documentation library
© Infosys Technologies Limited 2004-2005
BUILD SUBJECT MATTER EXPERTISE
 Emphasis on recruiting business
consultants and analysts, both in local
markets and India, with structured
training programs delivered in-house
(banking, securities, insurance)
 Aggressive focus on domestic and
international certifications (NCFM,
Securities Institute UK, GARP, Certified
Treasury Professional, LOMA, HIPAA,
Actuarial Certification, etc)
 Quantify various key assets from
existing projects to leverage innovation
and enhance capability for new initiatives
Benefits
• Rapid account ramp-up (20 times within 6
months) while maintaining & improving quality
• Condensed implementation time by ~25-35%
• Infosys now considered as Benefits Experts to
end-users of the client
Analyst Meet 2004 | New Game. New Rules. Slide 13
…and are taking steps to ensure Infosys remains
the highest value & lowest risk provider

OUR RISK MITIGATION FOR CLIENTS

OUR RESPONSE
RESPONSE AND
AND FOCUS
FOCUS 2004+
2004+

 Increase focus on building subject  Leverage multiple world-wide and

matter expertise across the Indian locations to mitigate
organization geographical concentration risk
 Achieve partner-of-choice status
through low risk (and high value)  Appointment of Chief Risk Officer for
proposition
key accounts
 Develop industry-focused services
and business solutions internally or
through alliances
 Disaster Recovery and Business
Continuity plan for all accounts
 Provide integrated, end-to-end,
outsourcing services

Leading US Retail and Investment Bank Benefits

• Appointed a Chief Risk Officer for the account • Infosys now ranked as the lowest risk and
• highest value service provider
Conduct semi-annual Business Continuity Planning exercise
• Significant reduction in account risk leading to
• Conduct external & internal audits to asses information security risks faster adoption of outsourcing
• Quarterly review of Gramm Leach Bliley compliance • Business has grown by more than 240% in the
• Compliance with BS7799 security standards last 1 year

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 14
Our response is a solutions-led strategy that will quickly address
common business and technology problems for our clients

OUR DEVELOP INDUSTRY-FOCUSED SOLUTIONS

OUR RESPONSE
RESPONSE AND
AND FOCUS
FOCUS 2004+
2004+

 Solutions comprise process know-how,

 Increase focus on building subject
domain and industry expertise and strong
matter expertise across the
technology competency
organization

 Achieve partner-of-choice status  Solutions have been identified after

through low risk (and high value)
proposition
 Develop industry-focused services
and business solutions internally or
through alliances
 Provide integrated, end-to-end,
outsourcing services
extensive client validation (Exceptions
Management, AML, Claims Process
Automation, etc)
 Forged alliances with established and
emerging technology vendors focused on
this industry

AML Solution for a Leading Investment Bank Benefits

• Leveraged engagement experience to develop solution for Anti-Money
Laundering
• Partnered with leading AML technology provider – Mantas
• Conducted training programs on regulatory compliance and AML to
build expertise
• Significant traction on regulatory compliance
engagements
• Compliance solution has attracted higher
margin consulting & solutions business

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 15
We are also redefining our established outsourcing model
to offer a seamless IT & Operations offering to our clients

OUR INTEGRATED OUTSOURCING

OUR RESPONSE
RESPONSE AND
AND FOCUS
FOCUS 2004+
2004+
 Integrate Technology & Operations at the
strategic, operational and tactical level using our
 Increase focus on building subject GDM to ensure long term value
matter expertise across the
 Strategic Level
organization
 At the Board level to capture value and
 Achieve partner-of-choice status provide direction
through low risk (and high value)  Operational level
proposition • Change Management and Organization
changes to facilitate integration
 Develop industry-focused services  Tactical Level
and business solutions internally or • IT Awareness of Operations
through alliances • Process Application Clustering
• Innovation Management
 Provide integrated, end-to-end,  Integrated service offering with Progeon
outsourcing services

Leading mortgage and investment products firm Benefits

• Client wanted to reduce its total cost of loan servicing operations • Client ramp-up of over 300%
• Infosys recommended IT & process improvements in loan servicing
• Savings of more than $5 million a year for
operations including redesigning and implementing several applications
( loan origination, reporting & workflow and customer service) client
• Progeon provided mortgage back office functions such as loan • 100% increase in transactions handled per day
servicing, financial accounting and customer support • 70% improvement in rate confirmation
turnaround time

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 16
 The structure for the next generation company-
the new rules of the new game.
Weak
Very Strong
Global Offshore
Majors Players Infosys
• Next Generation GDM High
Execution Ability

– Seamless delivery
– Scalability

• Process Maturity
Infosys

Execution Ability
• Talent Attraction &
Retention

Offshore
• Solution-led Selling Players
Industry Competence

• Deep Industry
Knowledge
Global
Majors
• Client Engagement &
Account Mgmt Low

Industry Competence High

“Over the years, [Infosys] has developed the domain expertise to service
the financial services community and offers support for such core
business responsibilities as asset management, investment banking,
brokerage services, risk management and custody and clearing.” –
Waters Financial Publication

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules. Slide 17
Thank You