Iress Limited · ASX:IRE
Iress — Investor Day (May 2016)
89 slides from Iress's investor day presentation, May 11, 2016
Slide 1: Cover letter to ASX: Investor Day Presentation
For personal use only ASX Market Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 11 May 2016 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 Day Sydney 11 May 2016
For personal use only Investor Day Sydney 11 May 2016 iress.com 1
Slide 3: Welcome & introduction
For personal use only Welcome & introduction Andrew Walsh CEO & Managing Director iress.com 2
Slide 4: Outline of morning
Outline of morning For personal use only IRESS Overview Market Overview – UK Wealth Management Andrew Walsh Simon New CEO and Managing Director Group Executive Strategy Introducing ViewPoint Segment Overview - Lending Matt Rady Simon Badley Group Executive Financial Markets Managing Director UK The
Slide 5: Key messages for today
Key messages for today For personal use only Long history of Today is focussed on only product-led investment specific & topical areas Product innovation and delivery is • IRESS continues to invest in capital markets at the core of IRESS’ strategy capabilities - ViewPoint well received • The advice
Slide 6: IRESS Overview
For personal use only IRESS Overview Andrew Walsh CEO & Managing Director iress.com 5
Slide 7: Who we are
Who we are For personal use only We create software and solutions Credible Efficient and flexible for the world’s financial services industry, empowering them to and valuable efficiently analyse, plan, engage, advise, trade and implement, and We service a broad landscape, from Clients choose us for
Slide 8: Sustained strategic approach
Sustained strategic approach For personal use only Dividends ($Am) 50 40 Strategic 30 Acquisitions 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Product, Development Recurring market and revenue and H1 H2 of market geographic strong cash TSR diversity leading conversion products 180
Slide 9: Disciplined approach to growth
Disciplined approach to growth For personal use only Export Local relevance, Invest in Pursue Acquire IRESS IP global presence our people scale Continue to export Retain local Attract, develop & Consistently look Committed IP leveraging relevance & retain top talent. to streamline and deliberate pro
Slide 10: History of disciplined acquisition and geographic expansion
History of disciplined acquisition and geographic expansion For personal use only Acquired VisiPlan Commenced Acquired operations in Innergi the UK Acquired Spotlight Acquired Acquired Interactive Acquired Acquired Proquote and XPLAN (RSA) FundData Peresys (RSA) Pulse (UK) 2000 2003 2005 2007 2009 2
Slide 11: A focus on revenue diversity
A focus on revenue diversity Revenue growth and diversity by segment and geography For personal use only 2005: $73m 2010: $180m 2015: $362m Wealth Management 7% Lending 9% Wealth Management Financial 28% Markets Wealth 43% Financial Financial Management Markets Markets 48% 93% 72% 146% 101% Revenue
Slide 12: A focus on earnings diversity
A focus on earnings diversity Revenue growth and diversity by segment and geography For personal use only 2005: $28m 2010: $86m 2015: $119m Wealth Management 3% Lending 6% Wealth Management Financial 23% Markets 37% Wealth Financial Financial Management Markets Markets 56% 97% 77% 207% 38% Earnings
Slide 13: IRESS today
IRESS today For personal use only Canada: 72% of retail and 39% UK: 95% of Top100 wealth of institutional sell-side order flow managers. 65% of advised mortgages & 25% of mortgages Revenue: 6% of Group processed People: 62 SE Asia: Leading provider of Revenue: 34% of Group CFD trading platforms Peop
Slide 14: Our product investment approach
Our product investment approach For personal use only People in Product & Development Product & Development Investment A$m Corporate 100 10% Operations 80 14% Development & 60 Product Account Management 54% 40 22% 20 0 2005 2015 The majority (76%) of our people work on developing our products and di
Slide 15: Our 2015 financial results
Our 2015 financial results Reflects successful execution of strategy For personal use only $Am 2014 2015 Operating Revenue FY15 361.5 Operating Revenue 329.0 361.5 p10% FY14 329.0 Segment Profit 111.4 119.2 p7% FY13 250.6 Segment Profit after SBP 102.5 109.3 p7% Segment Profit Reported (NPAT) 50.7 5
Slide 16: People & Culture
People & Culture For personal use only People by geography People by function Corporate 10% Australia & UK New Zealand Operations 43% 40% 14% Development & Product 54% Account Management 22% South Africa 11% Canada Asia 4% 2% People by location reflects our international The majority of our people w
Slide 17: People & Culture: how we do things around here
People & Culture How we do things around here For personal use only • Open and direct • Integrity, honesty • Creativity • Business awareness communication and fairness • Working proactively • Commercial • Teamwork • Results focused • Scale, not size • Client driven • Leadership • Specialist knowledg
Slide 18: People & Culture - Collaborative innovation
People & Culture - Collaborative innovation For personal use only iress.com 17
Slide 19: People & Culture – Community involvement
People & Culture – Community involvement For personal use only iress.com 18
Slide 20: We value diversity
We value diversity Our commitment to diversity is simple - we want to create and maintain a workplace where our people For personal use only can achieve their best, regardless of individual differences: gender, physical attributes, family status, sexual orientation, age, race, origin, ethnicity, rel
Slide 21: Market trends & opportunities
Market trends & opportunities For personal use only Financial Markets Wealth Management Mortgages • Institutional sell-side conditions • Macro wealth management themes • Macro economic and market remain challenging consistent globally and evolution change dynamics continue to drive continues to crea
Slide 22: Our business priorities in 2016
Our business priorities in 2016 For personal use only Canada: Focus on diversified UK: Continued momentum in growth from established cost delivery and revenue. Value- base. Successful delivery of creation following acquisitions. landmark PWM solution. Successful delivery to landmark SE Asia: Revenue
Slide 23: A focus on flexibility: ViewPoint
A focus on flexibility For personal use only User-centered design examples leveraging IRESS core architecture • ViewPoint - IRESS’ next generation active trading platform. • Designed for exceptional user experience. • Built on the latest technologies leveraging IRESS core architecture. • Design opti
Slide 24: A focus on flexibility: Prime
A focus on flexibility For personal use only Prime scaled-advice designed for client engagement leveraging XPLAN core • Self-directed (‘robo-advice’) tools allowing consumers to receive end to end advice and product/investment selection through a digital portal. • Leveraging IRESS APIs, clients may
Slide 25: A focus on flexibility: MSO platform
A focus on flexibility For personal use only MSO platform to meet operating efficiency and digital strategies of our lending clients • MSO (V2) - highly configurable and functionally rich solution, to manage full Mortgage Sales and Originations process (from enquiry, to funds, to bank on-boarding) •
Slide 26: Introducing ViewPoint
For personal use only Introducing ViewPoint Matt Rady Group Executive - Financial Markets iress.com 25
Slide 27: Leveraging IRESS core
Leveraging IRESS core ViewPoint IRESS Pro For personal use only • HTML5 • Fully integrated to • Advanced • ~10k users globally IRESS OMS professional terminal • Exceptional UX • Unified on IRESS • IRESS core product • 111 Global core • Visualisation of data suite and functions Exchanges • Modular op
Slide 28: IRESS ViewPoint
IRESS ViewPoint For personal use only iress.com 27
Slide 29: Evolving advice landscape
For personal use only Evolving advice landscape Aaron Knowles Group Executive - Product iress.com 28
Slide 30: Advice industry agents of change
Advice industry agents of change For personal use only Regulation change Technology driven • Fiduciary duty to • Robo models and • User experience • Innovation & clients, applied digitisation while & accessibility 24/7 rapid iteration differently in different protecting advice • Mobility • Building
Slide 31: Advice delivered via 'channels'
Advice delivered via ‘channels’ For personal use only Full Service No service Guided Advice: Guided Advice: Self-directed Holistic Advice Face to Face Phone / Online “Robo” advice Execution only • Handles high • Advice provided with • Very simple • Highly brand-able, • Non-advice complexity and inte
Slide 32: Core advice architecture
Core advice architecture For personal use only Connectivity Account opening STP Revenue Trade mgmt Advice Management Mortgage tracking Production Disclosure Forms Modelling Business mgmt Strategy engine Fee collection & Documentation Payments Disclosure Compliance Client Wealth Management Management
Slide 33: Response: An Advice Platform
Response: An Advice Platform One system supporting multiple channels, providing consistent advice and customer experience For personal use only Full Service No service Guided Advice: Guided Advice: Face to Face Phone / Online Self-directed Holistic Advice advice / Robo Execution only Prime Platform
Slide 34: Self-directed ("Robo") solutions
Self-directed (“Robo”) solutions For personal use only Self-directed advice Execution only Corporate Wealth Independent & Bank Manager Financial Adviser Very simple concepts, non-personal advice Own front-end Integrated to core Easy to implement for and own branding investment research non-technolog
Slide 35: One channel isn't enough
One channel isn’t enough For personal use only iress.com 34
Slide 36: Starting out in self-directed
Starting out in self-directed For personal use only iress.com 35
Slide 37: Robo solutions: Wealthify
Robo solutions: Wealthify Flexible creative software solution with full IRESS API support For personal use only The flexibility of the IRESS platform also allows for digital-only solutions such as Wealthify to interact through full API support. Wealthify leverages IRESS’ platform for global market i
Slide 38: Robo solutions: 'IRESS bank'
Robo solutions: ‘IRESS bank’ For personal use only iress.com 37
Slide 39: Same solution, different skin
Same solution, different skin For personal use only iress.com 38
Slide 40: Self-directed ("Robo") solutions
Self-directed (“Robo”) solutions For personal use only Self-directed advice Execution only Corporate Wealth Independent & Bank Manager Financial Adviser Very simple concepts, non-personal advice Own front-end Integrated to core Easy to implement for and own branding investment research non-technolog
Slide 41: Delivering Guided Advice
Delivering Guided Advice For personal use only Full Service No service Guided Advice: Guided Advice: Self-directed Holistic Advice Face to Face Phone / Online “Robo” advice Execution only • Handles high • Advice provided with • Very simple • Highly brand-able, • Non-advice complexity and inter- advi
Slide 42: XPLAN Prime: Guided advice
XPLAN Prime: Guided advice For personal use only • Designed for very specific advice scenarios, • Designed with large advice networks in offered as a ‘menu’ mind, but equally suitable for any adviser providing guided advice • Focusses the client on their goals & objectives • High focus on the User E
Slide 43: Demonstration - Prime
For personal use only Demonstration - Prime iress.com 42
Slide 44: Summary
Summary For personal use only • There isn’t one advice model, isn’t one Robo model to suit all. Diversity and adaptability key to providing advice technology at scale. • Advice providers are increasingly operating across multiple advice ‘channels’. Separate technology per advice channel can introduc
Slide 45: Morning Tea
For personal use only Morning Tea iress.com 44
Slide 46: Market Overview: UK Wealth Management
For personal use only Market Overview UK Wealth Management Simon New Group Executive - Strategy iress.com 45
Slide 47: Contents
Contents For personal use only Market Recent Change IRESS description history drivers responses iress.com 46
Slide 48: UK market snapshot
UK market snapshot Wealth Management in the UK is a deep market across multiple client segments. For personal use only Wealth brackets Example participant Ultra High • Multi Family Net Worth Offices (MFO) (UHNW) £10m+ • Independent private banks (inbound) High Net • Independent private banks Worth (
Slide 49: Client segment needs
Client segment needs Participants are typically found to operate across client segments and therefore client For personal use only needs. This requires flexibility and capability across product and service propositions, frequently a challenge with legacy technology. Assets Product needs Financial ad
Slide 50: Market orientation
Market orientation The wealth market is serviced by a diverse range of business models, standalone or For personal use only complex / multi-brand participants. While still fragmented, significant overlap exists, and convergence is increasingly prevalent. Manufacturers Wealth Managers Family Proposit
Slide 51: Recent History
For personal use only Recent History iress.com 50
Slide 52: Convergence from broking
Convergence from broking Stockbroking models have evolved through market structure, client expectation, and For personal use only revenue pressure. Increasingly, adding services has been evident as participants have sought to address client need and retain clients / revenues. Tax Specialist Digital
Slide 53: Convergence from planning
Convergence from planning Planning / advice models have evolved through regulatory censure and reform, market For personal use only structure, client expectation, and revenue pressure. As remuneration structures have changed, a trend to integrated wealth models is evident. Tax Specialist Digital Ser
Slide 54: Operating model reality
Operating model reality Technology fundamental to normalizing business process over reality of operational For personal use only complexity, regulatory scrutiny, and multiple custody solutions. Business ProcessBusiness ProcessBusiness Process Custody / Back Custody Custody / Back Custody Custody Cus
Slide 55: Recent market activity
Recent market activity Whist there are examples of organic convergence, convergence through consolidation has For personal use only accelerated and dominates press headlines. Convergence through consolidation Scale through consolidation iress.com 54
Slide 56: Integrated wealth management
Integrated wealth management A large and growing number of participants now provide a range of services. These span For personal use only execution only, private asset management, advice, digital servicing… and usually span multiple legacy systems. Broking (FM) Integrated Wealth Advice (WM) • Adviso
Slide 57: Change drivers
For personal use only Change drivers iress.com 56
Slide 58: Change in the UK Wealth Market
Change in the UK Wealth Market For personal use only Client expectations Regulation change • Increased intrusion • Pensions Freedoms • Changing • Differentiation by demographics segment • MIFID II • FATCA • Digital expectation • Restoration of Trust • FAMR • CRD IV • Trust and security • Suitability
Slide 59: Change impacts and responses
Change impacts and responses For personal use only Impacts on Participants Participant Response • Regulatory paranoia • Continued convergence • Increasing cost pressure • Increased consolidation • Priorities v available capital • Apathy no longer an option • Renewed focus on efficiency • Move to str
Slide 60: Our responses
For personal use only Our responses iress.com 59
Slide 61: Our unified capability
Our unified capability The acquisition of Proquote & Pulse have expanded and accelerated people & product For personal use only capabilities. Financial Markets Wealth Management Lending Market data and trading software Integrated wealth management Multi-channel mortgage sales and including order and
Slide 62: Response to market opportunity
Response to market opportunity For personal use only Ongoing investment continues to enable timely responses to impacts on participants. Change Impact IRESS Relevance Addressing ‘advice gap’ and 1 adviser efficiency Solutions focus Improving operational Strong functional integration 2 efficiency and
Slide 63: IRESS functional capability
IRESS functional capability IRESS’ integrated capability allows all client segments to be serviced effectively, providing For personal use only greater coverage and opportunity. Client Portal • Mobile Market Data • Trading • Touch • APIs Integrated Wealth Desktop Portfolio Management Modelling / Ord
Slide 64: Segment-based implementation
Segment-based implementation Implementation approach is shaped by factors including budget, timeline, expectation and For personal use only scope. Our approach varies based on those factors by typically follows the pattern below. IFA Mid-size licensee Private Wealth Institution • Standard product(s)
Slide 65: Segment priorities
Segment priorities For personal use only Although characterised by different priorities and segment specific requirements, there is commonality across IRESS’ business priorities that transcends segments. Trading Private Wealth Retail Wealth Mortgage Technology enabled advisor efficiency SmartHub int
Slide 66: UK Wealth Market Summary
UK Wealth Market Summary For personal use only 65m people, 9000+ financial advisory businesses and over 200 private wealth managers. Industry Trends Participant Challenges IRESS Opportunity • Fragmented industry • Delivering scalability - driving • Increasing demand for undergoing consolidation whic
Slide 67: Segment Overview: UK Lending
For personal use only Segment Overview UK Lending Simon Badley Managing Director UK iress.com 66
Slide 68: Contents
Contents For personal use only The UK The Lending & Benefits and Example MSO mortgage distribution MSO strategy essentials of broker journey market landscape technology iress.com 67
Slide 69: The UK lending market
For personal use only The UK lending market iress.com 68
Slide 70: The UK market snapshot
The UK market snapshot Retail banks see winning in this market as a strategic imperative. For personal use only 2016 gross lending Type of Firm market £237bn • Large-scale retail banks • Strategic drive to retain and grow • Complex business and technology architecture £12 - • Divestment of non-core
Slide 71: Change stimulants in the market
Change stimulants in the market For personal use only Market disturbance Regulation change • Digitalisation • Mortgage Market Review (MMR) • Client focus and retention • EU Mortgage Credit Directive • New lenders and challenger banks • FCA innovation hub - products and technology • “Digital” mortgag
Slide 72: Mortgage market changes
Mortgage market changes For personal use only IMPACT TO LENDERS/DISTRIBUTION RESPONSE BY LENDERS • Continued growth in mortgage • Focus on retail bank divisions to demand deliver stand-alone efficiency and profitability • Increasing costs through sub-optimal legacy architecture • Mortgage is strong
Slide 73: Growth in new entrants
Growth in new entrants For personal use only New banks and lenders such as Atom Bank, Mondo, Starling and Tandem are eager for the highly profitable UK market. 19 new banks authorised in the last 5 years and government wants to licence another 15 new banks by 2020. Existing lenders investing in the
Slide 74: Lending distribution
For personal use only Lending distribution iress.com 73
Slide 75: Role of mortgage intermediaries
Role of mortgage intermediaries For personal use only Total Gross Mortgage Lending in £bn Key mortgage market figures for 2015 300 250 200 70% 69% 80% 150 100 Mortgages Increase in Increase in 50 sold via broker lending intermediaries numbers volumes 0 2010 2012 2014 2016 Between 60 and 70 more comp
Slide 76: Technology drivers
Technology drivers IRESS Mortgage Survey For personal use only Lack of investment in legacy, 77% of intermediaries in heavily manual systems the survey requested system Since MMR (2013) regional referrals to regional improvements and changes building societies have increased to 30-40% of including a
Slide 77: Our strategic positioning
Our strategic positioning Lending value chain For personal use only Connecting the UK mortgage industry Advice Research Application Mortgage Intermediaries and Brokers Mortgage Lenders application data Product Data Application status data XPLAN Trigold MSO Fragmented, subscale technology 15K brokers
Slide 78: MSO and benefits
For personal use only MSO and benefits iress.com 77
Slide 79: IRESS lending business
IRESS lending business Business objective is to transition Lending business to a product-led, UK market-dominant, scalable business with For personal use only predictable revenues and strong growth. Strategic objective is to connect the UK Mortgage industry from advice through research to originatio
Slide 80: What is MSO?
What is MSO? Multi-channel D2C Branch Call centre For personal use only Distribution Intermediary Rich sales experience Sales Originations Channel specific journeys Task driven empowered staff Omni-channel, multi device Common processes and standards Real-time case tracking Automated MI & Pipeline m
Slide 81: MSO client benefits
MSO client benefits For personal use only Omni-channel solution Straight through Consistent application with modern, responsive processing for of policy and process user interface intermediaries via regardless of channel Trigold and XPLAN Mortgage integration Great customer Reduced processing Reduce
Slide 82: How does it work? Sales and originations
How does it work? Sales and originations For personal use only Rich sales experience D2C Branch Call centre Intermediary Product & Fact find compliance Intuitive user experience Initial enquiry Decision Product Apply In principle confirmation • The core elements of the sales process are the same acr
Slide 83: Example MSO intermediary journey
For personal use only Example MSO intermediary journey iress.com 82
Slide 84: Intermediary sales journey
Intermediary sales journey For personal use only Broker has view of all cases in one place iress.com 83
Slide 85: Intermediary home page
Intermediary home page For personal use only Broker is alerted of completion across all devices iress.com 84
Slide 86: How does it work? Integrations central to efficiency
How does it work? Integrations central to efficiency For personal use only Mortgage Product Solicitors Printing Fraud Customer System Decisioning Intermediary Database Database Reserve LENDER ABSTRACTION LAYER Physical Valuations Document Store MSO ABSTRACTION LAYER AVM Payments (CHAPS BACS) PAF Com
Slide 87: Q&A
For personal use only iress.com Q&A 86
Slide 88: 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 89: Office contact details
For personal use only AUSTRALIA NEW ZEALAND ASIA Melbourne | +61 3 9018 5800 Auckland | +64 9 300 5571 Hong Kong | +852 3965 3343 Sydney | +61 2 8273 7000 Wellington | +64 4 462 6850 Singapore | +65 6672 6288 Perth | +61 8 6211 5900 Brisbane | +61 7 3011 4700 Adelaide | +61 3 9018 5800 CANADA SOUTH