Iress Limited · ASX:IRE
Iress — Investor Day (May 2018)
98 slides from Iress's investor day presentation, May 10, 2018
Slide 1: ASX cover letter: Investor Day Presentation
For personal use only ASX Market Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 10 May 2018 Dear Sir/Madam IRESS LIMITED – Investor Day Presentation Please find attached for market release an information pack that will be presented later this morning to investors and analysts. You
Slide 2: Investor Strategy Briefing 2018
For personal use only Investor Strategy Briefing 2018 10 May 2018 Sydney, Australia 8.30am to 12.30pm iress.com 1
Slide 3: Welcome & introduction
For personal use only Welcome & introduction Andrew Walsh CEO iress.com 2
Slide 4: Agenda
Agenda For personal use only Company, market & strategy Andrew Walsh Growth in a changing landscape Andrew Walsh Simon New Morning tea Solutions for now and the future Aaron Knowles Emily Chen Speed, scale and quality Andrew Todd Close and Q&A Andrew Walsh iress.com 3
Slide 5: Global Hackathon 2018
Global Hackathon 2018 - 10 & 11 May For personal use only 24hr Global Hackathon ● Starts 2pm today ● People submit ideas, form teams around them ● Cross-functional, cross-office and cross time-zone ● Developed ideas progress through to production and delivery ● 250+ ideas ● 132+ teams ● 600+ people
Slide 6: Focus of today
Focus of today For personal use only Who we are today Restating our growth strategy What we said we would focus on in 2016 Today’s briefing focuses only on some specific What we’ve delivered growth aspects and areas of IRESS’ business - wealth, the UK and Australia. The opportunity ahead What we are
Slide 7: Who we are
For personal use only iress.com Who we are 6
Slide 8: Who we are today
Who we are today For personal use only Market data from 12,000 153 9,000+ clients across 11 years professional trading XPLAN rated as #1 SMEs to global banks and market data users global exchanges World-leading 50,000+ solutions for data, trading, wealth, 1,881 people 55% in product advice software
Slide 9: Our ambition remains
For personal use only Our ambition remains We will be the most innovative, reliable, and respected technology partner of choice, through leading products and delivery excellence. Our clients will regard us as both essential and desirable. iress.com 8
Slide 10: Our strategy and opportunities are clear
Our strategy and opportunities are clear For personal use only Key drivers of growth Demand for broader Demand for software that Market consolidation Increasing Increasing regulatory integrated solutions to increases efficiency and increasing business demand for requirements enable client business r
Slide 11: We are achieving scale across geographies
We are achieving scale across geographies For personal use only South UK Africa Canada APAC iress.com 10
Slide 12: We have a robust business model
We have a robust business model For personal use only Recurring revenue: ~90% of revenue is recurring subscription fees Targeted investment to constantly enrich our solutions Modular, flexible solutions with consistent global code supporting scale Regulation and market structure drive software deman
Slide 13: … and a competitive edge across markets
… and a competitive edge across markets For personal use only People Relationships Product Scale Long-term, deep and Market-leading solutions, On-the-ground teams Global IP for local delivery trusted client partnerships broad integrated offering Global IP available to clients 450+ people in client t
Slide 14: … right across the value chain
… right across the value chain For personal use only External Front Office (Internal) Connectivity Middle Office Back Office Consumer Intermediary Portfolio Decisioning Implementation Execution Messaging Post Trade Books & records management & data Digital & robo CRM Portfolio analysis Market data O
Slide 15: In 2016 our focus was...
In 2016 our focus was... For personal use only Export Local relevance, Invest in Pursue Acquire IRESS IP global presence our people scale Continue to export IP Retain local relevance and Attract, develop and retain Consistently look to Committed and deliberate leveraging product suite. strengths whi
Slide 16: Two years of focused achievement
Two years of focused achievement For personal use only Export Local relevance, Invest in Pursue Acquire IRESS IP global presence our people scale Shared IP across markets. Globalised product and Investment in key people Investment in core Financial Synergy acquisition technology strategy and areas h
Slide 17: In addition we have delivered...
In addition we have delivered... For personal use only Major implementations to wealth managers in the UK Our scaled advice solution Prime to large ASX-listed organisations Superannuation solutions as a managed service Lending solutions to digital and mainstream banks, and new opportunities in Austr
Slide 18: The opportunity & our focus
For personal use only The opportunity & our focus iress.com 17
Slide 19: Where is the world going?
Where is the world going? For personal use only Demand for digitally-enabled multi-channel experience increasing Regulatory volume remains at unprecedented levels. More to come Price awareness driving downward pressure on fees Ongoing global regulatory change focused on improving transparency, Agein
Slide 20: What does this mean over the next five years?
What does this mean over the next five years? For personal use only Trading & Market Data Wealth Lending ● Pressure on sell-side accelerating ● Growth in highly integrated, ● Intermediated advice / mortgage in general however, automated, multi-channel business sales continue to play significant regi
Slide 21: Consistent themes driving global wealth growth
For personal use only Consistent themes driving global wealth growth Andrew Walsh CEO iress.com 20
Slide 22: A converging financial services industry
A converging financial services industry For personal use only Industry super investment management & insurance internalisation Convergence in private wealth management Mortgage brokers pushing into financial planning Stockbroking extension into financial planning/wealth iress.com 21
Slide 23: Retail convergence accelerating
Retail convergence accelerating For personal use only Broking Broking and advice Advice ● Advisory services Client management ● Client management ● Investment services Advisory services ● Research ● Research Discretionary management ● Business automation ● Portfolio management Order management & exe
Slide 24: Convergence from transactional broking to full-service wealth
Convergence from transactional broking to full-service wealth For personal use only Financial planning Multi-asset classes incl specialist Investments Estate planning Model portfolios Digital access incl robo Tax advisory & reporting Margin lending Discretionary management Insurance Adviser Adviser
Slide 25: The challenge for our clients
The challenge for our clients For personal use only Range of client attitudinal responses to change Business risk ● Overcoming perceived cost v business strategy driven by software HIGH KNOWLEDGE & ● Underestimating the change management required to deliver HIGH CONFIDENCE Technology changes Know bu
Slide 26: How we are able to help clients
How we are able to help clients For personal use only ● Flexible software solutions that can respond to convergence and regulation ● Configurable modular solutions covering client management, portfolio, trading, lending, insurance, retirement, mortgages, and planning ● Predictable costs and a credib
Slide 27: Modular design meeting client needs
Modular design meeting client needs For personal use only Client Portal • Trading • Mobile • APIs • Integrated Wealth Desktop Portfolio Management Middle Office Client Management Advice Client Portal • Multi-asset class • Account onboarding • CRM / client management • Fact find • Integrated online a
Slide 28: IRESS platform addresses spectrum of advice
IRESS platform addresses spectrum of advice For personal use only Full service Self-service (no service) Guided Advice: Guided Advice: Self-directed Holistic Advice Execution only Face to Face Phone / Online “Robo” advice Handles high complexity and Advice provided with adviser and Easy to use & und
Slide 29: Opportunity and growth in the United Kingdom
For personal use only Opportunity and growth in the United Kingdom Simon New Group Executive Strategy iress.com 28
Slide 30: Focus of today
Focus of today For personal use only Who we are in the United Kingdom The market and how we serve it Where we have focused and why The opportunity and our current focus iress.com 29
Slide 31: IRESS and UK context
IRESS and UK context For personal use only 94 22m 270+ quotes and 60,000 of the top 100 insurance e-apps facilitated private wealth advice firms are clients by IRESS monthly managers 28,000 £500bn 19,000 14,800 £870bn active FCA-registered managed on 19 IRESS advice end-users managed by private mort
Slide 32: IRESS client and products
IRESS client and products For personal use only Trading and Private wealth Sourcing - 30% Market data - 20% and advice - 50% Clients: Clients: Clients: Buy and sell side brokers, discretionary Advisory businesses, wealth Sell side - including insurance fund managers, advisory businesses managers, di
Slide 33: Wealth needs are extensive and increasing
Wealth needs are extensive and increasing For personal use only Product needs Advice needs Cash Established market equities Global equities Trust planning Ultra High Fiduciary services Net Worth Pensions Small-mid cap sectors Structured products SME: value extraction (UHNW) Specialist tax advice ISA
Slide 34: Segmentation and demographics of the wealth market
Segmentation and demographics of the wealth market For personal use only Wealth brackets Household top wealth by age cohorts (£bn) Ultra High Multi family offices Net Worth Independent private banks 1,211 (UHNW) (International) £10m+ 744 790 High Net Independent private banks 602 Worth (Domestic) 55
Slide 35: IRESS in the UK: Accessing the opportunity
For personal use only IRESS in the UK: Accessing the opportunity iress.com 34
Slide 36: The IRESS opportunity five years ago
The IRESS opportunity five years ago For personal use only Manufacturers Advice / Distribution £10 M+ In 2013, IRESS’ Proposition focussed opportunity complexity was advisers and £5 M planners following RDR changes. Asset Size £1 M £250 K Insurance Independent Companies Financial Adviser £100 K Reta
Slide 37: Increased opportunities for IRESS
Increased opportunities for IRESS For personal use only Manufacturers Advice / Distribution £10 M+ Further market Proposition opportunities were complexity anticipated and £5 M identified from growth and consolidation in Asset Size response to RDR. The £1 M Advisory Brokers acquisitions of Pulse Dis
Slide 38: Full breadth of UK market
Full breadth of UK market For personal use only Manufacturers Advice / Distribution Family £10 M+ Office The UK market Proposition continues to evolve Global Bank complexity and remains highly £5 M Alternative Independent Private Bank diverse. Current and Asset potential opportunities Asset Size Man
Slide 39: Our ability to meet the evolving market opportunity
Our ability to meet the evolving market opportunity For personal use only Financial Planning Private Wealth Retail Banks Insurer Asset Manager Evolution - Pressure to differentiate and - Increased cost and margin - Target area for growth - Re-establishing distribution - Continued margin pressures de
Slide 40: IRESS uniquely positioned in the UK landscape
IRESS uniquely positioned in the UK landscape For personal use only External Front Office (Internal) Connectivity Middle office Back office Consumer / Portfolio Messaging & Intermediary Decisions Implementation Execution Post trade Book & Records Planning Management Data IRESS Competitor 1 Direct an
Slide 41: Breadth and modularity supporting expanding client relationships
Breadth and modularity supporting expanding client relationships For personal use only External Front Office (Internal) Connectivity Middle office Back office Consumer / Portfolio Messaging & Intermediary Decisions Implementation Execution Post trade Book & Records Planning Management Data Adviser O
Slide 42: Product and delivery focus to unlock opportunities
Product and delivery focus to unlock opportunities Focus area Outcome For personal use only Simplified, pre-configured XPLAN launched for smaller clients Pre-configured XPLAN for Implementation approach and process update completed for faster delivery streamlined implementation Significant improveme
Slide 43: Example: Continued focus on the independent advice market
Example: Continued focus on the independent advice market For personal use only Pre-configured XPLAN Continual investment proposition for more in the XPLAN product. straightforward needs Focus on connectivity streamlined with further data implementations integrations Revised implementation options H
Slide 44: Example: Supporting a unified, consistent, new proposition
Example: Supporting a unified, consistent, new proposition For personal use only Organic and inorganic growth strategy underpinned by a clear vision of operating model End-client assets Service propositions Channels demanding comprehensive, integrated and scalable software £1m - HNW Joint venture £1
Slide 45: Resolving legacy technology silos and inefficiency
Resolving legacy technology silos and inefficiency For personal use only Legacy Technology & Operating Model Legacy model characterised by: Legal Business 1 Business 2 Business 3 Business 4 Business 5 Business 6 entities High cost / slow change operating model Struggling to cope with scale OIS | IAS
Slide 46: Enabling a simple, efficient and scalable technology and operating model
Enabling a simple, efficient and scalable technology and operating model For personal use only Delivering client Legal entities Single Client Entity benefits including; Online Investment Cost reduction - technology and Investment management Investment Advisory Multi Asset Portfolios Model Portfolio
Slide 47: Same problem and aspiration, different timeline
Same problem and aspiration, different timeline New client engagement where IRESS For personal use only selection has been based on: Current State ● Ability to support a single, multi-asset, multi currency and multi channel proposition ● Reputation, experience and track record ● Breadth, depth and c
Slide 48: Same problem and aspiration, different timeline
Same problem and aspiration, different timeline New client engagement where IRESS For personal use only Implementation - 8-9 months selection has been based on: Legal Single Client Entity entities Investment Model Portfolio Online Investment Investment Advisory Multi Asset Portfolios management Serv
Slide 49: Enabling a simple, efficient and scalable technology and operating model
Enabling a simple, efficient and scalable technology and operating model New client engagement where IRESS For personal use only Client portal +2 months selection has been based on: Legal Single Client Entity entities Investment Model Portfolio Online Investment Investment Advisory Multi Asset Portf
Slide 50: Enabling a simple, efficient and scalable technology and operating model
Enabling a simple, efficient and scalable technology and operating model New client engagement where IRESS For personal use only Advice tools + further 2-4 months selection has been based on: Legal Single Client Entity entities Investment Model Portfolio Online Investment Investment Advisory Multi A
Slide 51: Advice opportunities: Evolution of advice efficiency
Advice opportunities: Evolution of advice efficiency For personal use only Strategic considerations: Developing client propositions Design Considering regulatory requirements Defining desired business and operating models Assessing business case and benefits Technology alignment and simplification:
Slide 52: IRESS platform provides access to advice opportunities
IRESS platform provides access to advice opportunities For personal use only Typical current position IRESS enabled future state Multiple, role specific, desktops Single, pan-organisation desktop New Disjointed and inconsistent client propositions Supporting consistent, multi-channel delivery Fragme
Slide 53: UK focus - summary
UK focus - summary For personal use only Progressive market with strong growth opportunity Landmark milestone achieved, groundwork in place Focus on leveraging product investment at scale and pace Selective investment to capitalise on opportunities iress.com 52
Slide 54: Questions?
For personal use only Questions? iress.com 53
Slide 55: Strength in a changing landscape
For personal use only Strength in a changing landscape iress.com 54
Slide 56: Strong fundamentals
Strong fundamentals For personal use only Superannuation Australian stock market Managed funds AUM $2.6 trillion $1.9 trillion $3.4 trillion iress.com Sources: ASFA, December 2016, World Federation of Exchanges; Australian Bureau of Statistics 55
Slide 57: Advice and trading
Advice and trading For personal use only Retail advice 385,000 20,000 Digital SOAs in 2017 Statements of Advice produced AFSLs 1,700 60% scaled advice SOAs $750 billion in retail platforms Stockbrokers 2,500 Planners 17,500 Accountants 7,930 Average number of 3 million Australians intend to turn to
Slide 58: A changing landscape
A changing landscape For personal use only The succes s of artificia intelligence l depends on data iress.com 57
Slide 59: Evolving advice and technology landscape
Evolving advice and technology landscape For personal use only Institutional Non-bank & IFAs Retail-broking Super funds Evolution Ownership of advice Growth together with pressure on Evolution from transactional Larger role in providing advice and channels changing. education standards, compliance,
Slide 60: Diversity and strength in IRESS' Australian client base
Diversity and strength in IRESS’ Australian client base For personal use only iress.com Excludes institutional sell-side, online broking, and institutional buy-side clients. 59
Slide 61: Ongoing investment increasing functional gap
Ongoing investment increasing functional gap For personal use only iress.com Investment Trends 2017 Planner Software Benchmark Report; 60
Slide 62: What is driving the superannuation opportunity for IRESS?
What is driving the superannuation opportunity for IRESS? For personal use only Complex regulation driving technology change Advice growing opportunity • ATO Reporting (MAAS, MATS 2018/19) • APRA reporting • Face to face advice • Scaled advice • Robo advice (formats, real-time 2019) • First home sav
Slide 63: Industry super focus - member engagement & administration efficiency
Industry super focus - member engagement & administration efficiency For personal use only Administration transactions Industry fund focus areas for the next 12 months Transaction sources include new business, additional business, redemptions, general maintenance and advisors commissions/maintenance
Slide 64: What is a common landscape today?
What is a common landscape today? For personal use only Member Interactions Online Mobile Call centre Face-to-face Website Third Parties Member Portal Employer portal Advice technology Fund Operations REGISTRY Investment Contributions Regulatory Data Insurer Broker Bank Custody Accounting CRM manage
Slide 65: What is a truly automated superfund?
What is a truly automated superfund? For personal use only Member interactions Online Mobile Call centre Face-to-face Website Third Parties Member portal Employer portal Advice technology DIRECT INTEGRATION DIRECT INTEGRATION DIRECT INTEGRATION Fund operations ACURITY Investment Contributions Regula
Slide 66: Industry super and advice is a growth opportunity
Industry super and advice is a growth opportunity For personal use only Where will consumers seek advice in the future? ● Industry funds focusing currently on advice to at-retirement members and ongoing advice in post-retirement. ● Growth in advice and advisers continues despite flat total adviser g
Slide 67: Digital advice a key enabler in industry super
Digital advice a key enabler in industry super For personal use only Biggest growth expected in scaled (limited) advice delivered over phone, video, and digital channels. Only 5 digital advice providers in 2017, producing 20,423 (2017) digital SOAs. 4 of these were super funds, and 100% of these wer
Slide 68: 5+ year outlook for industry super
5+ year outlook for industry super For personal use only ● Super funds will be highly-automated without data-entry, online without paper, and cloud-delivered. ● Administration will be re-defined as highly-automated core transaction processing. ● Digital advice to be the main medium for the delivery
Slide 69: The data opportunity
The data opportunity For personal use only The need and demand for data IRESS well placed to support digital, Businesses hampered today by: use and smarts is increasing: automated, controlled and evidentiary world: Multiple data sources Business strategies based on using data Automation of decisions
Slide 70: Introducing Lumen
Introducing Lumen For personal use only Why Lumen? ● Combining multiple data sets ● Structure + unstructured data ● Large data sets ● Real-time view and analytics iress.com Data does not represent actual client data. 69
Slide 71: Questions?
For personal use only Questions? iress.com 70
Slide 72: Morning tea
For personal use only Morning tea iress.com 71
Slide 73: Products and solutions for now and the future
For personal use only Products and solutions for now and the future Aaron Knowles Emily Chen Group Executive Product Executive Product Wealth Management iress.com 72
Slide 74: Our product and solution focus
Our product and solution focus For personal use only To design and deliver financial technology solutions that are both essential and desirable. Our software will stand for excellence. Clear & cohesive The experience Leading Solutions in our direction centres around users functionality as a platform
Slide 75: Key product themes
Key product themes For personal use only Data & Analytics Integrations User experience Insights, dashboards & mgmt reporting Wealth data feeds New design that unlocks rich functionality Real-time monitoring Integrated account opening Integrated Wealth & Trading Data warehouse product launch Real-tim
Slide 76: Digital lending consumer experience: Demo
For personal use only Digital lending consumer experience: Demo iress.com 75
Slide 77: Examples of third party integrations
Examples of third party integrations For personal use only iress.com 76
Slide 78: Key product themes
Key product themes For personal use only Data & analytics Integrations User experience Insights, dashboards & mgmt reporting Wealth data feeds New design that unlocks rich functionality Real-time monitoring Integrated account-opening Integrated wealth & trading Data warehouse product launch Real-tim
Slide 79: Self-directed advice: super funds
Self-directed advice: super funds For personal use only iress.com 78
Slide 80: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds For personal use only iress.com 79
Slide 81: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds For personal use only iress.com 80
Slide 82: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds For personal use only iress.com 81
Slide 83: Designing at scale, Delivering with confidence
For personal use only Designing at scale Delivering with confidence iress.com 82
Slide 84: IRESS Labs: Designing at scale
IRESS Labs: Designing at scale For personal use only 1 Design at Scale 2 Deliver with Confidence 3 Timely Delivery iress.com 83
Slide 85: XPLAN demo
For personal use only XPLAN demo iress.com 84
Slide 86: Speed, scale and quality
For personal use only Speed, scale and quality Andrew Todd Chief Technology Officer iress.com 85
Slide 87: Overview
Overview For personal use only A change to our release philosophy Cloud infrastructure and automation A focus on how we work iress.com 86
Slide 88: Market forces driving change for clients
Market forces driving change for clients For personal use only iress.com 87
Slide 89: A change to our release philosophy
A change to our release philosophy For personal use only Traditional software Different thinking about Global research of 2,000 software engineering processes can lead practices and capabilities have companies from 2013-2017 found: to building and releasing led to shifts in delivery and software act
Slide 90: A change to our release philosophy
A change to our release philosophy For personal use only Continuous Continuous Development Feedback Continuous Continuous Make software changes available more quickly integration Delivery with lower risk and at higher quality. Continuous Monitoring Continuous Testing iress.com 89
Slide 91: Cloud infrastructure and automation
Cloud infrastructure and automation For personal use only Historically Moving forward Owned, managed, rigid infrastructure Infrastructure as an on-demand utility Challenging to scale quickly Scalable, flexible cloud services Lower automation High automation Regional designs and architecture Global c
Slide 92: A focus on how we work
A focus on how we work For personal use only Structure Location Culture Building capability • Continuous learning • Improving quality • Increasing speed iress.com 91
Slide 93: Summary: Speed, quality and scale
Summary: Speed, quality and scale For personal use only Design thinking, flow & lean Cloud, deployment automation, concepts enhancing how we test automation, technology to do work help monitor code quality, Process Technology version control Quality outcomes Organisation People Culture Focus on cros
Slide 94: Questions?
For personal use only Questions? iress.com 93
Slide 95: Closing points
For personal use only Closing points Andrew Walsh CEO iress.com 94
Slide 96: Clear progress, opportunities and focus
Clear progress, opportunities and focus For personal use only Clear strategic progress and delivery Clear market opportunity & well-positioned Designing at scale Product investment & leverage Technology & operational scale iress.com 95
Slide 97: Disclaimer
Disclaimer For personal use only The material in this presentation is intended to be general background information on IRESS Limited and its activities, current at the date of the presentation. The information is provided in summary form and does not purport to be complete. It is not intended to be
Slide 98: Contact
Delivering outcomes today For personal use only developing for tomorrow designing for the future Contact Andrew Walsh, CEO +61 3 9018 5800 iress.com 97