Transcript Corporate & Financial Services Division Analyst & Investor

Wolters Kluwer Investor and Analyst
Divisional Day
Corporate and Financial Services
Christopher Cartwright
CEO Corporate and Financial Services Division
April 27, 2004
1
Agenda: Corporate and Financial Services (CFS)
 Position Within Wolters Kluwer
 Organization Evolution
 Divisional Strategy
 Customer Unit Strategies
– Overview
– Challenges
– Growth Opportunities
27 April 2004
CFS Division Day – New York
2
CFS Position Within Wolters Kluwer
 Software solutions and services
 Advanced workflow solutions
 Market leading positions
 Strong market growth
 High priority growth investments
 Strong restructuring potential
27 April 2004
CFS Division Day – New York
3
CFS Organization Evolution
4
Former LTBNA Cluster: A Portfolio of
Independent Operating Companies
LTBNA Operating
Companies
CCH Publishing
€278M
Aspen Publishing
€164M
Bankers Systems
€122M
Tax,
Accounting &
Audit
Legal
Community
Banks &
Credit Unions
Health &
Human
Resources
Legal
Education
Business
Finance &
Regulatory
Accounting,
Audit & Tax
Insurance
Tax Compliance
€140M
Revenue €1,025M
EBITA €267M
Canada
€40M
Legal Information
Services
€278M
Tax,
Accounting,
Audit
Corporation
Trust
Regional/
National
Banks
Tax
Software
UCC Direct
Services
Mortgage
Companies
Health &
Human
Resources
Corsearch
Legal
TyMetrix
Loislaw
Tax
Software
Securities &
Banking
Business
Filings
Government &
Regulatory
27 April 2004
CFS Division Day – New York
5
LTBNA Project ONE Reorganization: Aligned
with Customers
LTBNA
Customer Units
Tax, Accounting
& Audit
€342M
Legal
€242M
Revenue €1,025M
EBITA €267M
Financial
Services
Corporate Legal
Services
€166M
€282M
Tax Software
Large Law
Community
Banks & Credit
Unions
Tax Content
Small Law
Accounting &
Audit
Legal
Education
Regional/
National
Banks
Payroll &
Pension
Corporations
27 April 2004
UCC Direct
Services
Corsearch
Mortgage
Companies
Tymetrix
Insurance &
Securities
CFS Division Day – New York
Corporation
Trust
Business
Filings
6
Wolters Kluwer Divisions: Reorganized For
More Effective Management
Wolters Kluwer
Divisions
Revenue €1,099M
EBITA €277M
Tax, Accounting
& Legal
€651M
Tax, Accounting
& Audit
Corporate & Financial
Services
€448M
Legal
Corporate
Legal Services
€282M
Corporation
Trust
UCC Direct
Services
Corsearch
Financial
Services
€166M
Community
Bank/ Credit
Unions
Regional/
National Banks
Mortgage
Companies
TyMetrix
Business
Filings
27 April 2004
CFS Division Day – New York
Insurance &
Securities
7
Today's Focus: Corporate & Financial Services
Wolters Kluwer Divisions
Corporate & Financial
Services
TAL
Tax, Accounting
& Audit
Legal
Corporate Legal
Services
€282M
Corporation
Trust
UCC Direct
Services
Revenue €448M
EBITA €107M
Financial
Services
€166M
Community
Bank/ Credit
Unions
Regional/
National Banks
Corsearch
Mortgage
Companies
TyMetrix
Business
Filings
27 April 2004
CFS Division Day – New York
Insurance &
Securities
8
Corporate and Financial Services Revenue and
EBITA 2003
Total CFS Revenue €448M
Financial
Services
€166M / 37%
27 April 2004
Corporate Legal
Services
€282M / 63%
CFS Division Day – New York
Total CFS EBITA €107M
Financial
Services
€26M / 24%
Corporate Legal
Services
€81M / 76%
9
CFS Division Strategy
10
CFS Markets Have Strong Growth
Addressable Market Size: $ 1.9 billion
Core Financial
Compliance
$324 m (17%)
Legal
Compliance
Support
$904m (49%)
27 April 2004
Highlights

$1.9 billion market with 3-5%
growth annually

Growth in regulatory
complexity and compliance
penalties

Demand for integrated
compliance and productivity
solutions

Trend toward outsourcing
Large
Financial
Market
$630m (34%)
CFS Division Day – New York
11
Corporate and Financial Services Vision
Be the leading provider of comprehensive
integrated compliance and productivity
solutions for corporate legal and financial
compliance professionals
27 April 2004
CFS Division Day – New York
12
CFS Strategy: Invest in Growth, Reduce Costs,
Improve Customer Focus
1
Invest
 Develop corporate legal workflow suite
 Develop loan origination and deposit suite
 Extend into adjacent market segments
 New tools for growing securities and insurance markets
2
Reduce Costs
 Consolidate order to cash processes within customer unit
 Utilize North America HR, F&A and IT shared services
 Employ hybrid offshore development model
3
Reorganize
 Reorganize into customers units
 Integrate newly acquired products and businesses
 Improve sales and marketing effectiveness
27 April 2004
CFS Division Day – New York
13
Product Value Progression
Integrated
Solutions
Smart
Tools
Dynamic
Content
Retention
Static
Content
 Point software
solutions, e.g.
loan compliance,
document
retrieval, filing
 Integrated
workflow
solutions, e.g.
Arta End to End,
hCue
 Basic tools,
e.g. eForms
 Print products,
e.g. disclosures,
loan documents
Margin
27 April 2004
CFS Division Day – New York
14
CFS Shares an Integrated Solutions Vision
ADJACENT
LOW END
HIGH END
Functionality &
Integration
Basic
VALUE ADDED DEPTH
Advanced
INTEGRATED
PRODUCTS
PRODUCT LINE BREADTH
Narrow
27 April 2004
CFS Division Day – New York
Broad
15
CFS Has A Broad & Balanced Growth Program
New
Products
Expand Market Presence
Leverage Core
Competencies
Follow the
transaction
Strategic
investments in
growth
Consolidate Market Share
Extend into Segments
Extend into
adjacent segments
Gain wallet share
Existing
Existing
27 April 2004
Customers
CFS Division Day – New York
New
16
Corporate Legal Services (CLS)
17
WK Corporate Legal Services: What we do
 Market Need
– Comply with state legal requirements for doing business
– Outsource specialized administrative legal function
 CLS Meets the Needs: Products and Services
– Business entity management
– Registered agent services
– Lien filing and due diligence
– Records management and governance
– E-billing
– Trademark services
27 April 2004
CFS Division Day – New York
18
CLS: Businesses and Brands

CT Corporation
–

Leader in registered agent and
corporate filing services for corporations
and law firms
CCH Corsearch
–
UCC Direct Services
–


Leading provider of UCC filing and
document services that support bank
lenders and leasing professionals
Business Filings Incorporated
–
Internet-only provider of incorporation
and registered agent services for
entrepreneurs and small businesses
27 April 2004
CFS Division Day – New York

Offers trademark research and
intellectual property services for
attorneys and trademark experts in
corporations
TyMetrix
–
Provides electronic billing, invoice
review and matter management
solutions for corporate legal
departments
19
CLS: A Balanced and Growing Portfolio
CLS Revenue Distribution by Business
UCC Direct
Services
9%
CCH
Corsearch
4%
Business
Filings, Inc.
3%
TyMetrix
4%
CT Corporation
80%
27 April 2004
CFS Division Day – New York
20
Serving Corporate Statutory Needs Throughout
the Business Entity Lifecycle
Create
Manage
SOP
Terminate
Maintain
Withdraw
Complete
Corporate
Record
Amend
Lien
Due
Diligence
Merge
27 April 2004
CFS Division Day – New York
21
WK Corporate Legal Services: Who we do it for
 Markets
– Corporate legal
– Law firm
– Small business
– Lender
 Customer types
– General Counsel
– Corporate Secretary
– Litigation manager
– Paralegals and junior attorneys
– Loan compliance manager
– Entrepreneur
27 April 2004
CFS Division Day – New York
22
Corporations Are The Key Customers For CLS
Revenue by Market Segment
Corporate Legal
Departments
42%
Small
Businesses
30%
Lending
Institutions
10%
27 April 2004
CFS Division Day – New York
Law Firms
18%
23
WK Corporate Legal Services: How we do it
 Combine regulatory know how and service excellence
 Large national service organization to ensure a local
relationship
 Customer facing workflow software to manage compliance
transactions and record management
 Internal automation to drive productivity and service
27 April 2004
CFS Division Day – New York
24
CLS Is A Software Enabled Compliance
Services Intermediary
CLS Operations
Corporations
States
Law Firms
Banks
Courts
CT Customer
Specialist
Software
CT Fulfillment
SEC
Small Businesses
27 April 2004
CFS Division Day – New York
25
Unparalleled National Network Builds Local
Relationships
Rep Locations
Fulfillment
Corporate
UCC
Correspondent
27 April 2004
CFS Division Day – New York
26
Market Environment
 Business cycle
 Competition
 Regulatory simplification
 Disintermediation
27 April 2004
CFS Division Day – New York
27
CLS Holds Leading Share In Its Core Markets
Corporate Legal Services Market Share
Addressable Market = $904 mln
Regional & Local
33%
Corporate
Legal Services
35%
CSC
18%
Choicepoint
1%
Diligenz
2%
NRAI
2%
27 April 2004
Datacert
2%
Thomson &
Thomson
7%
CFS Division Day – New York
28
Internet Access: Challenge And Opportunity
CLS Internal Operations
Corporations
States
Law Firms
Banks
www
Courts
CT Customer
Specialist
Software
CT Fulfillment
SEC
Small Businesses
27 April 2004
CFS Division Day – New York
29
Status of State Automation & Internet Adoption
Transactions Available on State Web Sites
January 2001
Today
Search for Existing Liens and File New Liens
UCC (Lien) Database
Images of Existing Liens
Certified UCC Search
File New/Amended Lien
26
8
0
0
43
26
9
29
37
6
6
11
9
50
15
26
26
23
Retrieve and File Corporate Documents
Business Entity Database
Images of Existing Business Filings
Good Standing Certificates
File Business Entity Forms
File Annual Report to the Jurisdiction
27 April 2004
CFS Division Day – New York
30
Growth Opportunities
31
Cementing CLS’ Intermediary Role In The
Internet Age
 Breadth
– Extend from compliance to governance to practice management
solutions
 Depth
– Add services and functionality to each product
– Integrate compliance and governance solutions with core
customer and corporate data
 Version
– Extend into mid-sized law firms, corporate markets, and small
business markets
– Bundle offers according to segment preferences
27 April 2004
CFS Division Day – New York
32
Internet Migration Enabled Integration of Compliance &
Governance Tools - A Major Opportunity
Corporate
Filing
Services
Main
Corporate
Record
Corporate
Records /
Governance
Management Structure
27 April 2004
CFS Division Day – New York
Registered
Agent
Services
Annual Reports
Insider Reporting
Public Records
Search, Retrieval
Incorporation
Qualification
Due Diligence
Online Public Records
Imaged Law Suits
33
Create An Integrated Solutions Suite Across
Corporate Legal Workflows
Practice Management
Compliance & Governance
Record
Management
Registered
Agent
Data Sharing
Matter
Management
Electronic
Service Of
Process
Transactions
E-Billing
Collaboration
Unified Customer and Corporate Data
27 April 2004
CFS Division Day – New York
34
Operational Process Efficiencies Drive
Productivity And Improve Customer Experience
 Internal Efficiencies
– ERP implementation
– Customer access to status and billing information
– Collaborative representation management system
 State Interfaces
– UCC filing interfaces to 23 states
– Annual report filing interfaces to 16 states
– Real-time search and document retrieval
– Electronic fulfillment from state web sites
– Monitor federal court dockets for filed litigation
– Data mine state records to capture revenue
27 April 2004
CFS Division Day – New York
35
WK Financial Services (FS)
36
WK Financial Services: What we do
 Market needs
– We serve a variety of financial institutions that, at their core,
accept deposits, lend money and make investments
– The financial services industry is highly regulated with layers of
complex and ever changing laws and regulations
 FS meets the needs: Products and Services
– We monitor and interpret federal, state and local laws and
regulations, plus track case law and business trends
– We distill this legal complexity into compliance “know how” and
imbed it in research and workflow solutions
– These solutions help our customers meet regulatory
requirements and increase productivity
27 April 2004
CFS Division Day – New York
37
WK Financial Services: Brands and Businesses
Banking
27 April 2004
Insurance
CFS Division Day – New York
Securities
38
Financial Services: Balance and Growth Across
Markets
Financial Services Revenues by Market
Insurance &
Securities
27%
Community
Banks
44%
Mortgages
17%
Credit Union
1%
27 April 2004
National Accounts
5%
CFS Division Day – New York
Regional Banks
6%
39
WK FS Business Unit Overview

–

Automated solutions that focus on the
Bank Secrecy Act (BSA), the USA
PATRIOT Act, and money laundering
control
CCH – Investment Management Group
–
CCH Insurance Services
–

–
Comprised of Capital Changes,
GainsKeeper, and Banking Compliance
product lines.
27 April 2004
CFS Division Day – New York

Leader in the development and delivery
of ASP-based enterprise solutions for
insurance agent hiring and licensing
business/compliance processes
CompliSource
–

The leading provider of insurancefocused compliance tools (research,
analysis and forms)
CT Insurance Services
Leading provider of compliance and
technology solutions that support the
mortgage lending industry
Atchley Systems, Inc.
–

Leader in development and delivery of
compliance solutions to support
financial services account opening
processes
VMP Mortgage Solutions
–


Bankers Systems
Leading provider of statutory and
regulatory information for the consumer
finance industry
CCH Wall Street
–
CCH Wall Street leverages the authority
of CCH’s securities law content to lead
the emerging market for integrated
software solutions that help securities
compliance officers increase efficiency
and decrease risk
40
WK Financial Services: Who we do it for
 Markets
–
–
–
–
Community, regional and national banks
Credit unions
Mortgage lenders
Insurance and securities firms
 Customer types
–
–
–
–
–
Compliance officers
Loan origination officers
Corporate legal departments
Licensing and appointment directors
Bank presidents
27 April 2004
CFS Division Day – New York
41
WK Financial Services: How we do it
 We translate our compliance knowledge into documents,
business rules, software tools and compliance and productivity
systems
 We deliver our compliance knowledge in a variety of formats:
paper and electronic forms
– Stand alone software tools (Arta Lending, Arta Deposit,
Rembrandt)
– Integrated loan and deposit systems (Arta End to End)
– Integrated loan documentation components (ICS)
– Online research systems and forms (NILS and CCH IRN)
– Compliance monitoring, detection and case management
systems (AML, Compliance Eye, Patriot Act)
27 April 2004
CFS Division Day – New York
42
Increasing Compliance Complexity Creates
Growth Opportunities
Business
Policies
State
Legislation
Underwriting
Rules
WK FS
Compliance
Knowledge
Federal
Legislation
Federal
Agencies, SelfRegulatory
Orgs
Lawsuits State Courts
Lawsuits Federal Courts
State Agencies
and Regulators
... and increases barriers to entry
27 April 2004
CFS Division Day – New York
43
Federal & State Banking Legislation Monitored
in 2003
10,383 Bills Introduced
2,000
168,813 Bills Introduced
30,000
32,300
1,825
1,500
20,000
1,000
6,616
10,000
500
89
0
0
Federal Legislation
Legislation tracked by Bankers
Systems that had a potential
impact on financial institutions
27 April 2004
CFS Division Day – New York
50 States and the District of Columbia
Tracked legislation
enacted into law
44
Federal Agencies Monitored

Each agency creates regulations with which banking institutions
are required to comply
– Federal Reserve Board
•
•
•
•
•
•
•
•
•
•
Truth in Lending
Truth in Savings
Electronic Funds Transfer
Expedited Funds Availability
Equal Housing
Fair Lending
Community Reinvestment
Identity Theft
Fraud
Privacy and Data Security
27 April 2004
CFS Division Day – New York
– Federal Trade Commission
• Cosigner Rule
• Privacy
– Housing and Urban
Development
• RESPA (Regulation X)
45
Service Excellence
 In-house attorneys, legal assistants, compliance analysts and
retirement plan consultants with numerous industry certifications
 Network of outside legal firms in each jurisdiction
 Industry and marketing experts focusing on product development,
enhancements, workflow and efficiencies
 Certified technology professionals in the development and support
areas
27 April 2004
CFS Division Day – New York
46
Market Environment

Consolidation
– Transaction and asset
concentration within very large
financial services organizations
– Community bank decline

Convergence
– Customers need broader solutions
– Market expanding as large
institutions develop full service
offerings

Migration
– Transition from print to electronic
and copyright violations
cannibalizing print revenues

Financial
– Customers need to improve speed
to market, reduce costs and
control risks through automation
and outsourcing

Regulation
– Increasing regulation across all
parts of industry, e.g. Gramm
Leach, Patriot Act, Basel, adding
to compliance risk and market
growth

Competition
– BSI had leading market share in its
core community bank market but
limited penetration amongst larger
financials institutions
27 April 2004
CFS Division Day – New York
47
Leading Market Share In Banking Compliance
Financial Compliance Market Share
WKFS Highlights
Addressable Market = $324 mln
Others
33%
BSI
46%
Harland
21%
27 April 2004
CFS Division Day – New York

Market leader in community banks
and mortgage segments

Competition in community banks
from low price firms claiming
“good enough” compliance

Reputation based on compliance
expertise and service

Growing presence in regional and
national bank markets
48
Financial Assets and Transactions Increasingly
Concentrated in Large Institutions
Distribution of Banks
< $1B Assets
94% of Banks (8,600)
> $10B Assets
1% of Banks (100)
$1B-$10B Assets
5% of Banks (450)
Asset Distribution
>$10B Assets
70% of Assets
(100 Banks)
< $1B Assets
16% of Assets
(8,600 Banks)
$1B-$10B Assets
14% of Assets
(450 Banks)
... WK FS is moving up market for growth
27 April 2004
CFS Division Day – New York
49
WK Financial Services Growth
Opportunities
50
Financial Services Strategy
 Breadth
– Extend across loan origination and deposit transactions for
community banks and credit unions
– Develop new insurance and securities products
 Depth
– Add services and functionality
– Develop financial intelligence tools
– Integrate content into a single customer unit repository
 Version
– “BSI Inside” loan compliance documentation system up market to
large banks
27 April 2004
CFS Division Day – New York
51
End-to-End Loan Origination and Deposit
Solutions
LENDING WORKFLOW
ORIGINATE THE LOAN
Sales &
Marketing
Loan
Application
Obtain
Credit
Score &
Decision
SERVICE THE LOAN
Document
Document
Loan
Loan
Loan
Closing
Account
Servicing
Portfolio
Management
Loan
Tracking
Post
Close
Compliance
LOS transaction data

Collect required data

Data driven “document” selection

Data driven text completion

Identity verification

Implement business rules

Create enforceable transaction

Provide compliance warnings
Fees, collateral, rates,
borrower address
Customer file
Internal data – i.e. customer data
related to existing products, liens
 AML suspicious activity
detection
 Credit scoring and decisions
 Customer Connection
 Risk assessment
Public data
External data – i.e. property location,
geo-coding, flood designation
27 April 2004
 CRA and HMDA
CFS Division Day – New York
 Payment & rate calculation
 Loan tracking
52
Penetrate Large Bank Market With Integrated
Loan Compliance Solution
27 April 2004
CFS Division Day – New York
53
Significant Benefits of CFS Integrated Product
Strategy
 Increased market share
 Increased retention
 Higher prices
 New revenue streams
 Greater average spend per customer
 Increased pressure on competition
 Increased scale in sales and marketing
 Increased scale in product development and service
27 April 2004
CFS Division Day – New York
54
Summary: Corporate and Financial Services
 Cost controls
– Effective cost controls in place
– Strong restructuring potential
– Scale improvement with deeper integration within customer units
and shared services
 Innovation
– Integrated products vision
– Broad and balanced growth plans
– Priority for WK growth investments
 Markets
– Improved near term market conditions
– Long term market growth
27 April 2004
CFS Division Day – New York
55
Questions?
56
Corporate Legal Services
Gene Landoe
CEO
57
Corporate Legal Services Vision
Become the comprehensive provider of
corporate legal enterprise solutions and
services that enable the efficient
management of corporate compliance,
governance, litigation and cost control
27 April 2004
CFS Division Day – New York
58
Corporate Legal Services Will Invest to Expand
Market Presence and Reduce Cost Structure
1
 Automated workflow solutions for corporate and UCC
transactions
Invest
 Corporate Governance and SEC Compliance software
 Expand integration of matter management and
litigation management solutions
2
Reduce Costs
 Implement end-to-end electronic fulfillment
 Increase level of web-based service automation
 Migrate to hybrid offshore development model
3
Reorganize
 Integrate new products transferred from CCH business
unit (EDGAR Ease and Equity Compliance)
 Improve software sales and support capabilities
27 April 2004
CFS Division Day – New York
59
Increasing Breadth of CLS Product Offerings
Across the Corporate Legal Department
CORPORATE
COMPLIANCE
SERVICES
(Transactional)
CORPORATE
GOVERNANCE
(Subscription)
REPRESENTATION
(Subscription)
CORPORATE
SECRETARY
GENERAL
COUNSEL
–Manage and
track entities,
officers,
shareholders,
ownership
–Annual report efiling,
qualifications
amendment and
withdrawal filings
–Registered
Agent Services
–Corporate
calendar
–Document
retrieval
–Insider
reporting, SEC
Section 16 3,
4, and 5 filings
–Perfection of
liens and lien
portfolio
management
–Company
records and
delivery
instructions
–Electronic bill
verification and
management
–Archive of SOP
transmittals
–Measurement
and reporting
–10Q, 10K, 8K
processing
–Due diligence
services
27 April 2004
GENERAL
COUNSEL
LITIGATION
MANAGEMENT
(Subscription)
–Imaged Service
of Process
GENERAL
COUNSEL
–Matter
management
integrated with
Service of
Process
TRADEMARK
RESEARCH
(Transactional/
Subscription)
GENERAL
COUNSEL
- Trademark
clearance
searches
- Trademark
watching
services
–Compliance
calendar
CFS Division Day – New York
60
CLS Product and Service Offerings Across the
Corporate Legal Department
CORPORATE
COMPLIANCE
SERVICES
(Transactional)
CORPORATE
GOVERNANCE
(Subscription)
REPRESENTATION
(Subscription)
CORPORATE
SECRETARY
GENERAL
COUNSEL
–Manage and
track entities,
officers,
shareholders,
ownership
–Annual report efiling,
qualifications
amendment and
withdrawal filings
–Registered
Agent Services
–Corporate
calendar
–Document
retrieval
–Insider
reporting, SEC
Section 16 3,
4, and 5 filings
–Perfection of
liens and lien
portfolio
management
–Company
records and
delivery
instructions
–Electronic bill
verification and
management
–Archive of SOP
transmittals
–Measurement
and reporting
–10Q, 10K, 8K
processing
–Due diligence
services
27 April 2004
GENERAL
COUNSEL
LITIGATION
MANAGEMENT
(Subscription)
–Imaged Service
of Process
GENERAL
COUNSEL
–Matter
management
integrated with
Service of
Process
TRADEMARK
RESEARCH
(Transactional/
Subscription)
GENERAL
COUNSEL
- Trademark
clearance
searches
- Trademark
watching
services
–Compliance
calendar
CFS Division Day – New York
61
hCue Cements CT's Role as the Expert
Custodian of the Main Corporate Record
Improved process for managing corporate compliance and governance
Customer
Need

Comply with new SEC, Sarbanes-Oxley requirements


Record and manage changes to corporate structure, management and ownership
Effective method for reporting insider stock purchases and sales to SEC
Integrated corporate records management and compliance tool
Solution

Intelligent tool for capturing corporate structure, management and ownership


Corporate calendar to organize board meetings, communication and compliance
Detailed record of insider stock transactions and integrated electronic reporting to
the SEC
Centralized repository for corporate compliance and governance
Value
Value
 Web-based for easy access and collaboration, supporting the Fortune 1000
 Efficient re-use of data to pre-populate and complete electronic compliance filings
 Increases corporate transparency in an era of increased scrutiny
27 April 2004
CFS Division Day – New York
62
hCue Expands CT’s Role in Corporate
Compliance and Governance
hCue: Manages and tracks entities, officers, shareholders, ownership
Communication with
key stakeholders
@
SEC Insider management
and electronic 3, 4, and 5
filings
Multi-purpose corporate
calendar for compliance and
scheduled events
2004-2005
Annual Report
Board Meeting
Annual
Shareholder
Meeting
Board of Directors
Committees
Officers
Shareholders
27 April 2004
Electronic Filing of SEC
16 Forms 3, 4 & 5
CFS Division Day – New York
Integrates with
CTAdvantage.com’s
compliance tools
Federal
Regulatory
Filing
63
Extending Further Into Corporate Litigation
Workflows
Streamlined litigation management and cost control
Customer
Need

Manage and track legal expenses

Efficient communication and collaboration with outside counsel

Replacement of paper with electronic documents/bills
Integrated service of process, matter management and e-billing
Solution

Seamlessly transfer information from CT registered agent system to TyMetrix

Create single record when lawsuit is received, informing all parties

Provide ASP platform for electronic communication between corporation and law
firms
End-to-end solution for litigation and billing management
Value
Value
 Improved metrics and measurement of costs related to managing litigation
 Significant reduction in time spent scrutinizing and approving legal invoices
 Fewer manual hand-offs and reduction in errors
27 April 2004
CFS Division Day – New York
64
Integration of Litigation Workflow From Receipt
To Resolution
> CT’s former
role in litigation
management
was limited
> Integrating TyMetrix
Matter Management
and E-Billing creates
efficiencies for both
corporate legal
departments
and law firms
Plaintiff's
attorney files
initial process
CT receives, logs, scans and
transmits SOP
Matter
Management
System
Bills audited and
benchmarked
Document
Management
System
Electronic
Billing
System
Reports, Metrics, Risk analysis
27 April 2004
CFS Division Day – New York
65
State Automation Has Allowed CLS to Address
a Complex, Time-consuming Compliance Issue
Simplify, automate work required to maintain "good standing" in each jurisdiction
Customer
Need

Easy process to understand requirements for compliance filings across jurisdictions
to maintain good standing

Reduce data gathering, manual form completion and generation of checks

Allow collaboration between corporate legal and tax departments
Integrated corporate records management and compliance tool
Solution

Use customer record to populate compliance calendar

Automatically alert customers to upcoming filing deadlines

Pre-populate and e-file annual report data and pay fees and taxes electronically
Automated workflow for compliance management
Value
Value
 Significantly reduce complexity and work associated with maintaining compliance
 Maintain filing history and audit trail
 Provide collaborative Web workspace
 Avoid fines and fees associated with falling out of compliance
27 April 2004
CFS Division Day – New York
66
CT Automates Annual Report Filing and
Franchise Tax Payment
Customer data pre-populated
1
Proactive compliance
management
Email notification
Intelligent tools contain
requirements of each
jurisdiction
2
Electronic payment
processing
CALENDAR
State returns electronic
filing confirmation
4
3
27 April 2004
Customer reviews
and edits
information
CFS Division Day – New York
Order captured in
order management
system,
electronically file
annual report
67
Segment-specific Product/Service Packages
Key to Growth in Core Market
Offer new services, grow share
Customer Segment
•
Large Companies:
1.4% of customer base
35% of revenues
Mid-sized companies:
2.1% of customer base
14% of revenues
Offer Full Range
of Services
•
•
Package Registered Agent with:
Imaging, Annual Report Subscription,
and hCue with SEC Insider Reporting
Module
Corporate Filing and Document Retrieval
Introduce Matter Management and eBilling
and integrate with document management
Version services for middle market
Research
Indicates Good
Small Companies:
96.5% of customer base
51% of revenues
•
Potential for
Targeted
•
Package Registered Agent with:
Imaging, Annual Report Subscription,
and hCue with SEC Insider Reporting
Module
Corporate Filing and Document Retrieval
Growth
Broaden offering to smaller customers
•
27 April 2004
CFS Division Day – New York
Package Registered Agent with:
Imaging and Annual Report Filing
Subscription Enabled by Credit Card
Payment
68
iLienOnline: Offering Functional Depth and
Breadth to the Secured Lender
Increased efficiency in identifying credit risk and perfecting lien
Customer
Need

Automate lien due diligence and portfolio management

Ability to distribute work across multiple groups/locations

Faster lien perfection, real-time status
End-to-end electronic, Web-based, lien portfolio management
Solution

Electronic delivery of search results and images of existing liens

Web-based platform allows broad access across financial institution

Real-time filing and retrieval with the states delivers immediate status
Intelligent workflow tools for lending and leasing professionals
Value
Value
 Proactive monitoring of life-span of a liens, automating subsequent filings
 Comprehensive repository of due diligence regarding debtors
 Comprehensive access to the public record
 Extensive reporting
27 April 2004
CFS Division Day – New York
69
Due Diligence and Lien Management Workflow
1
Financial Co. begins
loan process
2
Search
Results
Portfolio
Due Diligence
Create Lien
3
State System
27 April 2004
Financial Co. makes
loan decision
Files lien
against debtor
Financial Co.
automatically
notified
Lien
Portfolio
Store Lien
State System
CFS Division Day – New York
5
4
Monitors
debtor
State System
70
Opportunities for Growth in Expanding Product
Portfolio and in Addressing New Markets
New
Leverage Market Presence
•Matter management
•Electronic legal billing
•Expanded governance
solutions
Products
Existing
•Financial Printers
•Mutual fund companies
Large & middle market corporations
and law firms, financial institutions
Consolidate Market Share
•Representation
•Filing and searching
•Lien portfolio management
•Records management
•Trademark research
Large & middle market corporations
and law firms, financial institutions
Existing
27 April 2004
Expand Core Competencies
Into New Markets
Large and middle market firms in
the securities market
Expand into New Segments
•Representation
•Filing and searching
Small and entrepreneurial
businesses and law firms
Customers
CFS Division Day – New York
New
71
Financial Services
Bob White
CEO
72
Financial Services Vision
Be the leading provider of information,
tools and services, addressing areas of
compliance, operational and credit risk
for financial services organizations
27 April 2004
CFS Division Day – New York
73
Financial Services Will Invest to Expand Market
Presence and Reduce Cost Structure
1
 Expand loan origination system for total end-to-end solution
Invest
 Address complex new and emerging compliance issues
 Leverage IP to develop solutions for large financial institutions
 Expand compliance tools for insurance and securities
2
Reduce Costs
 Consolidate order management and fulfillment operations
 Migrate towards Shared Services for division and customer unit
 Evolve to hybrid offshore development model
3
Reorganize
 Create segment-specific business units to increase customer
focus
 Consolidate offices appropriately to better align solutions and
support for customers
27 April 2004
CFS Division Day – New York
74
WKFS Solutions Across the Financial
Services Marketplace
COMMUNITY & REGIONAL
BANKS, CREDIT UNIONS
–End-to-end
workflow
solutions
NATIONAL BANKS
–Integrated
compliance
solutions for
content
–Documentation in
management and
all mediums
document
creation
–Operational
compliance
–Anti-fraud and
training and tools
anti-money
laundering
–Anti-fraud
solutions
solutions and
anti-money
–IRA management
laundering
tools
MORTGAGE
INSURANCE
–Expert Analysis
–Integrated
–Insurance
mortgage
compliance
documentation and content including –Cost Basis Tracking
delivery
summaries and
and Tax Lot
matrices
Accounting
–Mortgage
compliance content –Internet tools for
–Written Supervisory
management
cancellation and
Procedures
solutions
non-renewal
–Anti-fraud solutions
–Documentation in
all mediums
–Automated
licensing and
appointments
–Custom document –Outsourcing and
–IRA management –Professional
library services
licensing filing
tools
technical services
services
27 April 2004
SECURITIES
CFS Division Day – New York
–Tool for EM and IM
compliance
–Trade surveillance
and anti-money
laundering
75
WKFS Solutions Across the Financial
Services Marketplace
COMMUNITY & REGIONAL
BANKS, CREDIT UNIONS
–End-to-end
workflow
solutions
NATIONAL BANKS
–Integrated
compliance
solutions for
content
–Documentation in
management and
all mediums
document
creation
–Operational
compliance
–Anti-fraud and
training and tools
anti-money
laundering
–Anti-fraud
solutions
solutions and
anti-money
–IRA management
laundering
tools
MORTGAGE
INSURANCE
–Expert Analysis
–Integrated
–Insurance
mortgage
compliance
documentation and content including –Cost Basis Tracking
delivery
summaries and
and Tax Lot
matrices
Accounting
–Mortgage
compliance content –Internet tools for
–Written Supervisory
management
cancellation and
Procedures
solutions
non-renewal
–Anti-fraud solutions
–Documentation in
all mediums
–Automated
licensing and
appointments
–Custom document –Outsourcing and
–IRA management –Professional
library services
licensing filing
tools
technical services
services
27 April 2004
SECURITIES
CFS Division Day – New York
–Tool for EM and IM
compliance
–Trade surveillance
and anti-money
laundering
76
Current State – Loan Origination
 Banks use many different systems to document loans
– Systems do not “talk” to each other
– Data must be re-entered into each system
– Keeping up with law changes is difficult
– Integration of systems is difficult and expensive
– Maintaining integration over time is more difficult
 The result
– Inefficient processes, costing time and money
27 April 2004
CFS Division Day – New York
77
End-to-End Solutions Automate Loan
Origination from Application to Close
Automated system to process & manage lending transactions start to finish
Customer
Need

Seamless integration of all steps in the transaction process


Easy to use, reduced data-entry duplication
Strong support from provider

Compliance with applicable state and federal laws
Solutions designed for complete workflow automation
Solution

Software components for complete lending workflow


Seamless integration between all components
Strong ability to manage customer and compliance data efficiently

Industry-leading compliance and support
Integrated lending solution eliminating manual work and mistakes
Value
Value
 Proven lending solution that handles routine and high-volume transactions
 Provides exceptional compliance support and flexibility
 Increases efficiency and productivity, and reduces risk
27 April 2004
CFS Division Day – New York
78
End-to-End Loan Origination and Deposit
Solutions
LENDING WORKFLOW
ORIGINATE THE LOAN
Sales &
Marketing
Loan
Application
Obtain
Credit
Score &
Decision
SERVICE THE LOAN
Document
Document
Loan
Loan
Loan
Closing
Account
Servicing
Portfolio
Management
Loan
Tracking
Post
Close
Compliance
LOS transaction data

Collect required data

Data driven “document” selection

Data driven text completion

Identity verification

Implement business rules

Create enforceable transaction

Provide compliance warnings
Fees, collateral, rates,
borrower address
Customer file
Internal data – i.e. customer data
related to existing products, liens
 AML suspicious activity
detection
 Credit scoring and decisions
 Customer Connection
 Risk assessment
Public data
External data – i.e. property location,
geo-coding, flood designation
27 April 2004
 CRA and HMDA
CFS Division Day – New York
 Payment & rate calculation
 Loan tracking
79
What’s Coming: A Suite of Integrated Solutions
- Growth Opportunity
Automated
Deposit Origination
Database,
Customer
Connection,
Imaging
and
Tracking
Compliance
Operational
Solutions
Policy Development
27 April 2004
CFS Division Day – New York
Identity Verification
and AML
PAC, ID Flag
Training, Support
Automated
Loan Origination
ARTA Deposit – End-to-End
Disclosures
Rembrandt
ARTA Lending – End-to-End
Comply-AML
80
WK FS Market Opportunities Based on New
Regulations and Enforcement
 USA PATRIOT Act and Bank Secrecy Act are complicated and
operationally challenging
 Financial Insights states that identity fraud costs financial firms
more than $3.4 billion in 2002
 Enforcement actions for violations of the Bank Secrecy Act
doubled in 2003 over 2002
 Existing processes are often manual and do not provide the
required:
–
–
–
–
Speed
Accuracy and security
Cost effectiveness
Record of actions taken
27 April 2004
CFS Division Day – New York
81
The USA PATRIOT Act and Bank Secrecy Act
Have Created a Need in Many Segments
Automated systems to manage fraud and money laundering risk
Customer
Need



PATRIOT Act and Bank Secrecy Act have created complex new compliance
requirements
Must automate in order to achieve efficiency and compliance results
Must integrate with existing workflow
A component based, integrated set of financial intelligence solutions
Solution




Domestic and international identity verification tools
Proven, reliable anti-money laundering solution
Integrated risk assessment tool
Efficient, effective case management system
Automated and up-to-date compliance with newest legislative requirements
Value
Value




27 April 2004
Reliable, proven and cost effective solutions
Strong compliance brand and reputation
Functionality and compliance with regulatory requirements
Multiple deployment options, including ASP
CFS Division Day – New York
82
Financial Intelligence Solutions Growth
Opportunities
BSI
BANK
Resources
& Tools
VENDORS
Professional
Services
Fraud
File
Identity Verification
Record
Retention
Global high-risk
check
System System System
1
2
3
AML
Software
Case
Management
OFAC
FINCen
Core
Processor
Risk Management
User Management
Billing
Automated Routing
Other (TBD)
27 April 2004
CFS Division Day – New York
83
CCH Wall Street Trade Surveillance and Case
Management Growth Opportunity
Compliance Officer
Inefficient
Use of Time
Reactive,
Not Proactive
CCH Wall Street
Email
WSP
3rd Party Data
Regs
Other
Inconsistent
Audit Terms
Manual
Processes
OFAC
Increasing
Workload
Compliance EYE
a/c info
Suitability Other firm
criteria
data
OMS
27 April 2004
Mutual Fund
Data
Clearing
Firms
CFS Division Day – New York
84
Market Opportunities - Banking Industry Trends
Drive Growth
 Bank consolidation
 Multiple, disparate legacy systems
 Increasing compliance requirements
 Profit pressures
 Inadequate solutions
27 April 2004
CFS Division Day – New York
85
Integrated Compliance Solutions (ICS)
Integrated solution for managing compliance documentation across enterprise
Customer
Need




Reduce the costs and risks of managing compliance throughout the enterprise
Increase internal efficiency and speed to market with new products
Fully integrated traditional banking, insurance and securities products
Provide flexibility to handle institutions own documents
Integrated compliance content and technology solution
Solution

Single repository of compliance content: documents, business rules and formatting

Integrated technology that is scalable, manageable, extensible and accessible

Customization capabilities
Streamlines workflows & automates internal processes with great flexibility
Value
Value
 Industry leading content
 Open architecture
 Combines content, integrated technology and customization capabilities
 Increases speed to market, reduces risks and costs, and improves efficiency
27 April 2004
CFS Division Day – New York
86
ICS Is Content and Platform Neutral to Expand
Into Multiple Segments
Insurance
Banking
Securities
Investment
Management
Market
Conduct
WSP
P&C and
Life Forms
Licensing
AML & BSA
Comm.
Lending
IRA
Deposit
Mortgage
Home Equity
Consumer
Lending
Customer Specific Solutions
Common Delivery Platform and Document Management
Authoring & Content Management Tools
Single Financial Services Content Repository
27 April 2004
CFS Division Day – New York
87
Opportunities for Growth in Expanding Product
Portfolio and in Addressing New Markets
Leverage Market Presence
New
• ICS for national banks
• Trade surveillance and antimoney laundering solutions
• Email and instant messaging
surveillance
•End-to-end solutions
•Anti-fraud solutions
•IRA management center
•Expanded insurance
content and tools
Products
Help solve emerging and expanding
needs for current customers
Consolidate Market Share
•Bundling strategy – Customer
•Loyalty program
•Software take-aways
•Leverage regulatory changes to
•Drive product sales, i.e, Check 21
Existing
Deploy new sales and marketing
strategies to drive increased revenue
Existing
27 April 2004
Expand Core Competencies Into
New Markets
Deliver trusted compliance content,
when, where & how customers want it
Expand into New Segments
•Securities broker registration
•Insurance agency licensing
•Financial training for brokers
Look across markets for new
opportunities
Customers
CFS Division Day – New York
New
88
Appendix
89
Footnotes to Specific Slides

Slide 11:
–
Core financial compliance market excludes national bank market where BSI has share of
<3%, securities and insurance
–
Sources: Annual Report of the Jurisdictions, Representation Data from Delaware,
Lieberman Research Group, Hase –Shannen ResearchFind/SVP, TowerGroup, Hoovers,
D&B, Celente, Company financials, analyst reports, WK information

Slide 28:Sources:
–
Sources: Annual Report of the Jurisdictions 2002 IACA, Representation Data from state of
Delaware 2003, and 3rd-party research including: “Representation Decision-Maker and
Market Sizing Study”, Lieberman Research Group, November 2002; “Usage of Legal
Information Services Firms”, Hase-Schannen Research, September 2003, and Market
Intelligence conducted by Find/SVP

Slide 48:
–
Others includes: GulfPak, CSI, CUNA Mutual, Greatland
–
Addressable market excludes national bank market where BSI has share of <3%, securities
and insurance
–
Sources: Hase –Shannen Research, Find/SVP, TowerGroup, Hoovers, D&B, Celente,
Company financials, analyst reports, WK information
27 April 2004
CFS Division Day – New York
90