Iress Limited · ASX:IRE
Iress — Investor Day (May 2018)
97 slides from Iress's investor day presentation, May 10, 2018
Slide 1: Investor Strategy Briefing 2018
Investor Strategy Briefing 2018 10 May 2018 Sydney, Australia 8.30am to 12.30pm iress.com 1
Slide 2: Welcome & introduction
Welcome & introduction Andrew Walsh CEO iress.com 2
Slide 3: Agenda
Agenda 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 4: 24hr Global Hackathon
Global Hackathon 2018 - 10 & 11 May 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 iress.com 4
Slide 5: Focus of today
Focus of today 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 doing to meet the opp
Slide 6: Who we are
Who we are iress.com 6
Slide 7: Who we are today
Who we are today 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 users and technology a
Slide 8: Our ambition remains
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 9: Our strategy and opportunities are clear
Our strategy and opportunities are clear 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 reduces the cost to do
Slide 10: We are achieving scale across geographies
We are achieving scale across geographies South UK Africa Canada APAC iress.com 10
Slide 11: We have a robust business model
We have a robust business model 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 demand in our chosen market
Slide 12: … and a competitive edge across markets
… and a competitive edge across markets 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 teams XPLAN #1 for 11 c
Slide 13: Business functionality right across the value chain
… right across the value chain 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 Order Execution Data ag
Slide 14: In 2016 our focus was...
In 2016 our focus was... 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 whilst leveraging top tal
Slide 15: Two years of focused achievement
Two years of focused achievement 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 has driven increase in
Slide 16: In addition we have delivered...
In addition we have delivered... 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 Australia Rollout of Viewpo
Slide 17: The opportunity & our focus
The opportunity & our focus iress.com 17
Slide 18: Where is the world going?
Where is the world going? 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, Ageing population and incre
Slide 19: What does this mean over the next five years?
What does this mean over the next five years? 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 regional-specific dynamics
Slide 20: Consistent themes driving global wealth growth
Consistent themes driving global wealth growth Andrew Walsh CEO iress.com 20
Slide 21: A converging financial services industry
A converging financial services industry 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 22: Retail convergence accelerating
Retail convergence accelerating 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 & execution ● Financial pla
Slide 23: Convergence from transactional broking to full-service wealth
Convergence from transactional broking to full-service wealth 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 Market access Client r
Slide 24: The challenge for our clients
The challenge for our clients 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 but Knowledgeable ● Avoi
Slide 25: How we are able to help clients
How we are able to help clients ● 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 credible alternative to high
Slide 26: Modular design meeting client needs
Modular design meeting client needs 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 account. • Multi-curren
Slide 27: IRESS platform addresses spectrum of advice
IRESS platform addresses spectrum of advice 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 & understand. Fast. Highly
Slide 28: Opportunity and growth in the United Kingdom
Opportunity and growth in the United Kingdom Simon New Group Executive Strategy iress.com 28
Slide 29: Focus of today
Focus of today 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 30: IRESS and UK context
IRESS and UK context 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 mortgage brokers wealth ma
Slide 31: IRESS client and products
IRESS client and products 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, discretionary fund compa
Slide 32: Wealth needs are extensive and increasing
Wealth needs are extensive and increasing 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 ISAs Emerging markets EIS
Slide 33: Segmentation and demographics of the wealth market
Segmentation and demographics of the wealth market 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) 556 £1m - £10m (HNW) Adv
Slide 34: IRESS in the UK: Accessing the opportunity
IRESS in the UK: Accessing the opportunity iress.com 34
Slide 35: The IRESS opportunity five years ago
The IRESS opportunity five years ago 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 Retail Bank (Advice) Servi
Slide 36: Increased opportunities for IRESS
Increased opportunities for IRESS 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 Discretionary Fund Manage
Slide 37: Full breadth of UK market
Full breadth of UK market 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 Managers Retail Bank – re
Slide 38: Our ability to meet the evolving market opportunity
Our ability to meet the evolving market opportunity 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 demonstrate client ‘valu
Slide 39: IRESS uniquely positioned in the UK landscape
IRESS uniquely positioned in the UK landscape 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 and indirect competitor
Slide 40: Breadth and modularity supporting expanding client relationships
Breadth and modularity supporting expanding client relationships External Front Office (Internal) Connectivity Middle office Back office Consumer / Portfolio Messaging & Intermediary Decisions Implementation Execution Post trade Book & Records Planning Management Data Adviser Office Proquote Existin
Slide 41: Product and delivery focus to unlock opportunities
Product and delivery focus to unlock opportunities Focus area Outcome Simplified, pre-configured XPLAN launched for smaller clients Pre-configured XPLAN for Implementation approach and process update completed for faster delivery streamlined implementation Significant improvement in speed of impleme
Slide 42: Example: Continued focus on the independent advice market
Example: Continued focus on the independent advice market 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 High retention of and a
Slide 43: Example: Supporting a unified, consistent, new proposition
Example: Supporting a unified, consistent, new proposition 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 £10m Investment Manageme
Slide 44: Resolving legacy technology silos and inefficiency
Resolving legacy technology silos and inefficiency 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 | Proposition FP / IM
Slide 45: Enabling a simple, efficient and scalable technology and operating model
Enabling a simple, efficient and scalable technology and operating model Delivering client Legal entities Single Client Entity benefits including; Online Investment Cost reduction - technology and Investment management Investment Advisory Multi Asset Portfolios Model Portfolio Service Services peopl
Slide 46: Same problem and aspiration, different timeline
Same problem and aspiration, different timeline New client engagement where IRESS 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 connectivity of IRESS s
Slide 47: Same problem and aspiration, different timeline
Same problem and aspiration, different timeline New client engagement where IRESS 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 Service Services ● Ability
Slide 48: 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 Client portal +2 months selection has been based on: Legal Single Client Entity entities Investment Model Portfolio Online Investment Investment Advisory Multi Asset Portfolios management Servi
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 Advice tools + further 2-4 months selection has been based on: Legal Single Client Entity entities Investment Model Portfolio Online Investment Investment Advisory Multi Asset Portfolios manage
Slide 50: Advice opportunities: Evolution of advice efficiency
Advice opportunities: Evolution of advice efficiency Strategic considerations: Developing client propositions Design Considering regulatory requirements Defining desired business and operating models Assessing business case and benefits Technology alignment and simplification: Rationalising infrastr
Slide 51: IRESS platform provides access to advice opportunities
IRESS platform provides access to advice opportunities 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 Fragmented client servicing
Slide 52: UK focus - summary
UK focus - summary 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 53: Questions?
Questions? iress.com 53
Slide 54: Strength in a changing landscape
Strength in a changing landscape iress.com 54
Slide 55: Strong fundamentals
Strong fundamentals 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 56: Advice and trading
Advice and trading 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 a financial platforms
Slide 57: A changing landscape
A changing landscape The succes s of artificia intelligence l depends on data iress.com 57
Slide 58: Evolving advice and technology landscape
Evolving advice and technology landscape 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, broking to broader wea
Slide 59: Diversity and strength in IRESS' Australian client base
Diversity and strength in IRESS’ Australian client base iress.com Excludes institutional sell-side, online broking, and institutional buy-side clients. 59
Slide 60: Ongoing investment increasing functional gap
Ongoing investment increasing functional gap iress.com Investment Trends 2017 Planner Software Benchmark Report; 60
Slide 61: What is driving the superannuation opportunity for IRESS?
What is driving the superannuation opportunity for IRESS? 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 saver/downsizer • Direct
Slide 62: Industry super focus - member engagement & administration efficiency
Industry super focus - member engagement & administration efficiency 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. Excludes auto-runs.
Slide 63: What is a common landscape today?
What is a common landscape today? 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 management Gateway reporting
Slide 64: What is a truly automated superfund?
What is a truly automated superfund? 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 Regulatory Data Insurer Brok
Slide 65: Industry super and advice is a growth opportunity
Industry super and advice is a growth opportunity 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 growth. ● Biggest growt
Slide 66: Digital advice a key enabler in industry super
Digital advice a key enabler in industry super 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 were intra-fund SOAs to e
Slide 67: 5+ year outlook for industry super
5+ year outlook for industry super ● 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 of ongoing advice. Not
Slide 68: The data opportunity
The data opportunity 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 and process of lower-
Slide 69: Introducing Lumen
Introducing Lumen 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 70: Questions?
Questions? iress.com 70
Slide 71: Morning tea
Morning tea iress.com 71
Slide 72: Products and solutions for now and the future
Products and solutions for now and the future Aaron Knowles Emily Chen Group Executive Product Executive Product Wealth Management iress.com 72
Slide 73: Our product and solution focus
Our product and solution focus 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 & strategy and client
Slide 74: Key product themes
Key product themes 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-time insurance quotes Rob
Slide 75: Digital lending consumer experience: Demo
Digital lending consumer experience: Demo iress.com 75
Slide 76: Examples of third party integrations
Examples of third party integrations iress.com 76
Slide 77: Key product themes
Key product themes 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-time insurance quotes Rob
Slide 78: Self-directed advice: super funds
Self-directed advice: super funds iress.com 78
Slide 79: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds iress.com 79
Slide 80: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds iress.com 80
Slide 81: Self-directed Advice: Super Funds
Self-directed Advice: Super Funds iress.com 81
Slide 82: Designing at scale, Delivering with confidence
Designing at scale Delivering with confidence iress.com 82
Slide 83: IRESS Labs: Designing at scale
IRESS Labs: Designing at scale 1 Design at Scale 2 Deliver with Confidence 3 Timely Delivery iress.com 83
Slide 84: XPLAN demo
XPLAN demo iress.com 84
Slide 85: Speed, scale and quality
Speed, scale and quality Andrew Todd Chief Technology Officer iress.com 85
Slide 86: Overview
Overview A change to our release philosophy Cloud infrastructure and automation A focus on how we work iress.com 86
Slide 87: Market forces driving change for clients
Market forces driving change for clients iress.com 87
Slide 88: A change to our release philosophy
A change to our release philosophy 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 activities consuming rele
Slide 89: Continuous Delivery
A change to our release philosophy 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 90: Cloud infrastructure and automation
Cloud infrastructure and automation 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 consistency iress.com 9
Slide 91: A focus on how we work
A focus on how we work Structure Location Culture Building capability • Continuous learning • Improving quality • Increasing speed iress.com 91
Slide 92: Summary: Speed, quality and scale
Summary: Speed, quality and scale 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 cross-functionality, Teamw
Slide 93: Questions?
Questions? iress.com 93
Slide 94: Closing points
Closing points Andrew Walsh CEO iress.com 94
Slide 95: Clear progress, opportunities and focus
Clear progress, opportunities and focus Clear strategic progress and delivery Clear market opportunity & well-positioned Designing at scale Product investment & leverage Technology & operational scale iress.com 95
Slide 96: Disclaimer
Disclaimer 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 relied upon as advice
Slide 97: Contact
Delivering outcomes today developing for tomorrow designing for the future Contact Andrew Walsh, CEO +61 3 9018 5800 iress.com 97