Private Banks: Growth Through Client Acquisition and Retention

1. Private Banks:Growth Through Client Acquisition and Retention Nick Hahn May, 2002

2. Agenda • Changing landscape • Strategic considerations • Strategic approaches • Who is Capco 2 - Private Banking - Sep-14 - Capco confidential

3. Changing landscape

4. EnvironmentBrand reputation is becoming increasingly important to growth, driven by recent poor product performance Elements important for future growth Introductions from parent/affiliate Introductions from existing clients Introductions from other intermediaries Own marketing/branding efforts M&A/strategic alliances Online presence % In 3 years Now Source: PricewaterhouseCoopers, Ceo Survey 4 - Private Banking - Sep-14 - Capco confidential

5. EnvironmentFor Private Banks, brand reputation operates on two critical dimensions -- quality assurance & affirmation status, but delivering both is extremely difficult Quality assurance Status affirmation Based on promises of future benefits based on today’s actions HNWI’s seek exclusivity • privacy • superior treatment • belonging • continuity/history • financial acumen • safety (i.e. large balance sheet) Universal bank groups Small private banks + + 5 - Private Banking - Sep-14 - Capco confidential

6. Survey of U.S. Affluent Households* Q: Would you describe this type of financial institution as…. Full-Service Broker 48% Bank 43% 38% 7% 6% 5% Delivering Sophisticated Investment Advice Knowledgeable About Investments Managing Investments for Good Returns *Source: PSI Global 1999 EnvironmentAdditionally, understanding the “elasticity” of what a brand stands for is critically important for success 6 - Private Banking - Sep-14 - Capco confidential

7. Results: Approaches in different markets will require even further refinement of brand message to ensure local relevancy • Cultural differences Illustrative Source: Hofstede; Capco analysis 7 - Private Banking - Sep-14 - Capco confidential

8. CustomersPrivate bank customers are becoming less homogeneous, due in part to an influx of new money and ….. • Customer assets Old money New money • Attracted to traditional brands • Desire more “elitist” products • Maintain wealth, spend conservatively • Concerned with confidentiality • Low desire for information • Allow banker to act on their behalf • High loyalty • Already “know” • Concerned with latest brands • Desire more “individualistic” products • Create wealth, spend flamboyantly • Relatively transparent • Demand real-time information access • Actively participate in wealth management process • Low loyalty • Need to “know” * % Client Base Now 54% 46% 3 Yrs. 43% 57% *Source: PWC, N.A. Private Banking/Wealth Management Survey 2000 8 - Private Banking - Sep-14 - Capco confidential

9. Customers…due in part to the increasing importance of valued advice, driven by a crisis in confidence and increasing product complexity, therefore …. • 67% of affluent customers use a collaboration client-advisor relationship focused on advice/guidance Elements important for client acquisition/retention Personal relationships Service quality Investment performance Valued advice Recommendation from other third parties Access to other providers’ products % In 3 years *Source: PricewaterhouseCoopers **Source: 2001 AMRP study Now 9 - Private Banking - Sep-14 - Capco confidential

10. Customers … current homogenous product/service offerings are resulting in lower customer loyalty to financial institutions • 22% of respondents were dissatisfied with their primary provider, and 43% were considering changing providers Why do you believe clients leave your organization, and why might they leave in the future? Ranking in 3 years Ranking now Importance Importance 1 2 Dissatisfaction with service Poor investment advice / performance Following key staff to other organizations Lack of proactive service Death Pricing of products 2 1 3 3 4 4 5 6 6 5 Source : PriceWaterhouseCoopers European Private / Wealth management survey 2000/2001 10 - Private Banking - Sep-14 - Capco confidential

11. Profitability comparison of major private banking institutions and asset management organizations 80 70 Private Banks Asset Management Organizations 60 50 40 Basis Points 30 20 10 0 CSPB UBSPB Sarasin Citigroup Julius Baer Merrill Lynch State Street Global J.P. Morgan Fleming Advisors Source: Capco analysis CompetitionMarketplace is growing rapidly, resulting in a highly competitive and time-sensitive environment High margins in private banking are attracting asset managers Competitors are attracted by the tremendous growth potential in HNW assets Source: Cap Gemini Ernst &Young Lorenz curve analysis; base data from multiple sources, including MSCI. 11 - Private Banking - Sep-14 - Capco confidential

12. U.S. Investment Providers* CAGR = 34.0% Advertising expenditure $ millions 1,316 959 870 714 408 1995 1996 1997 1998 1999 * Includes consumer-directed advertising by mutual funds and brokerage firms as well as non-FDIC insured product advertising by banks and insurers Source: Bernstein research CompetitionIt is increasingly expensive to get adequate share of voice 12 - Private Banking - Sep-14 - Capco confidential

13. ING • Understand and segment existing and potential newPB customers • New ING rebranding, and role of Private Bank in brand architecture • Consolidation of multiple trademarks to one entity --balance cost reduction vs. customer relevance • Umbrella brand proposition with locally relevant communications/activation • Growth with high ROI for marketing activities Branding & Marketing Issues Category ING • Shift to demand-driven business • Brand reputation increasingly important • Highly fragmented and increasinglycompetitive marketplace • Significant differences across differentlocal markets • Intense cost pressure 13 - Private Banking - Sep-14 - Capco confidential

14. Strategic Considerations

15. Strategic ConsiderationsSegmentation drives a tangible, customer demand-led business approach under a brand umbrella Customer segments • Brand • Aggregate attitudinal characteristics 1 • Product/Service and Price Bundles • Segment level attitudinal characteristics 2 • Integrated Marketing Plan • Desired behavioural change 3 15 - Private Banking - Sep-14 - Capco confidential

16. Customers segmentation A conventional view 1st Level Segmentation ‘affluence levels’ Mass Affluent HNWI Ultra HNWI Inheritors Entrepreneurs Earners IPO Entrepreneurs 2nd Level Segmentation ‘source of affluence’ Business Sellers Windfall Winners High Fliers Investment Bankers 3rd Level Segmentation ‘lifestyle description’ Sportsman IT Employees Source : Datamonitor Report 2001 16 - Private Banking - Sep-14 - Capco confidential

17. Customer segmentationA demand-driven view Illustrative output 17 - Private Banking - Sep-14 - Capco confidential

18. Customer segmentationUnderstanding of full customer landscape Illustration • Thrifty Conservatives • 8% Assets • Low Risk • Unsophisticated • Elitist UHNW 17% Assets Segment X Segment Y HNW 52% Assets • Up & Comers • 18% Assets • Moderate-high Risk • Knowledgeable • Brand Sensitive Segment Z Mass Affluent 31% Assets Age 18 - Private Banking - Sep-14 - Capco confidential

19. Share of Wallet* Aggressive Growers Steady Growers 60 50 40 30 20 10 0 0 10 20 30 40 50 60 About half (41 - 60%) Majority (61 - 80%) *Source: PWC, NA, PB/WM Survey 2000 Customer SegmentationInsight into assets, not just customers 19 - Private Banking - Sep-14 - Capco confidential

20. Corporate Brand Customer Brand Promise P E R S O N A L I TY + Product/Service Price Competitive Context Market Context Brand Brand reputation creates real economic value by impactingcustomer behavior $ B/E Revenue Variable costs Profit Fixed costs Number of customers x Higher # customers Higher revenue/customer Lower selling costs/ customer • Increased customer acquisition through higher awareness, purchase interest, and targeted value offering • Increased customer loyalty through higher perceived switching costs, customer- tailored value bundle, and relationship of trust • Drive loyalty to institutions rather thanrelationship managers • Lower selling costs due to: • better targeting • more impactful messaging • “automatic” consideration • better message “environment” • Customer willingness to pay premium price • Channel willingness to accept lower margin (If applicable) • Stimulate greater usage frequency due to higher satisfaction 20 - Private Banking - Sep-14 - Capco confidential

21. Brand Strong brands have both high recognition andstrong perceived reputation, and generate real economic value *Brand valuation calculated using recognized industry standard methodology (Interbrand/Citibank), CY 2000 ** Source: 2000 VIP Forum Affluent Survey: affluent sample group ($1MM USD investable assets+); percentage ranking 6 or 7 on 7 point scale 21 - Private Banking - Sep-14 - Capco confidential

22. Brand However, financial services companies have a poor track record of developing effective brands Brand value as a % of market cap (among top 100 brands) Avg. % 55% index vs. Avg. Source: Capco analysis; Interbrand, Citibank study 22 - Private Banking - Sep-14 - Capco confidential

23. Brand FSI brands are recognized, but are not seen as unique or valued by their customers Difference between awareness and reputation Awareness % Reputation (among aware) % Brand 9 36 17 56 59 5 38 55 61 56 100 81 76 71 66 60 53 45 40 34 % Source: 2000 VIP Forum Affluent Survey; affluent customers 23 - Private Banking - Sep-14 - Capco confidential

24. BrandValue propositions of most private banks cluster around “price of entry”, generic and largely functional benefits Deep relationship/ High quality advice HUMAN Achievement of Financial Results Life Goal Achievement Key: Deutsche Bank Credit Suisse Julius Baer Lombard Odier Sarasin FUNCTION Wide range/ quality of products and services 24 - Private Banking - Sep-14 - Capco confidential

25. Support Julius Baer Julius Baer Tagline “The fine art of Private Banking” • Trusted, deep, long-term personal relationship • Exclusivity Customer need/ want Deeply personal relationship, combined with top performance of “big banks” (functional) Promise • Tradition plus innovation • Highly customized service • Resources equal to larger banks • European sensibility: relationship driven, high-touch • Intimate, caring • Aristocratic, worldly • Old-world acumen and sophistication Personality 25 - Private Banking - Sep-14 - Capco confidential

26. Lombard Odier Lombard Odier none Tagline Consistent, long term investment returns Family-like relationship with bank Customer need / want Reliable performance, based on long tradition of excellence plus innovation (functional) Promise • Deep customer understandgin • Family values • 200 year-old tradition of discretion and continuity • Expertise in innovative investments Support • Exclusive, confidential • Highly ethical • Like a family-run business Personality 26 - Private Banking - Sep-14 - Capco confidential

27. Pictet Pictet “Your success is our benchmark” Tagline Customer need / want Bank that truly understands my needs Highly individualized trusted relationship (functional-- emotional) Promise • Highly confidential and trusted relationship aimed at giving the most personalized advice • Long experience and discretion • Guarded responsibility for money Support • Honest and personable • Solid and secure • Discreet Personality 27 - Private Banking - Sep-14 - Capco confidential

28. Credit Suisse Credit Suisse Credit Suisse Private Banking Tagline “It’s time for an expert” Personalized, trusted advice Customer need / want Best advice for me (functional -> emotional) Promise • Sharp service and advice to deliver products and services tailored to individual needs • Client-focused, tailor-made solutions backed by the power of CSFB Support • Intelligent • Insightful & understanding • Confident but understated Personality 28 - Private Banking - Sep-14 - Capco confidential

29. Tagline Deutsche Bank Private Banking Deutsche Bank Private Banking “_____ Connects” Customer need / want Customized solutions Individualized wealth optimization (functional) Promise • Personal and perceptive touch of a private bank with the performance of major global bank • Connection “points”: • personal understanding • trusted advice • integrated services/products • global presence • 24/7 communication • scale & track record Support • Competent, experienced, innovative • Serious • No nonsense Personality 29 - Private Banking - Sep-14 - Capco confidential

30. “Well-connected” Personalized plan to achieve my goals Truly personalized advice (functional-emotional) • Sharp service and advice to deliver products and services tailored to individual needs • Client-focused, tailor-made solutions backed by the power of CSFB • Intelligent • Insightful & understanding • Confident but understated Morgan Stanley Morgan Stanley Tagline Customer need / want Promise Support Personality 30 - Private Banking - Sep-14 - Capco confidential

31. Credit Suisse JP Morgan Customer need / want Personality JP Morgan Private Banking “With the 360 relationship you get the whole picture” Tagline Comprehensive services & products Comprehensive understanding and offerings to provide comprehensive service (functional) Promise • Committed to deep relationship to understand your personal needs • Depth and breadth of expertise, service and products across all wealth management disciplines • 160 years of experience Support • Influential • Old World • Inspired 31 - Private Banking - Sep-14 - Capco confidential

32. Goldman Sachs Goldman Sachs Tagline “This is leading” Customer need / want Growth & exclusivity Performance gold standard (functional -> emotional) Promise • Premium pricing • Unmatched product access (e.g. leadership in global underwriting • Leadership position in multiple industries • Market analysis leadership (e.g. Abby Joseph Cohen) Support • Confident / Arrogant • Sure footed • Aggressive Personality 32 - Private Banking - Sep-14 - Capco confidential

33. Tagline Promise Support ING Private Banking ING “ING--it’s not an ending, it’s a beginning” (teaser) Customer need / want Recognition and confidence in provider Refreshingly different in all aspects • Scale Combination of integratedproducts and types of businessand services • Steeped in tradition, but alsoinnovation • Locally relevant • Confident • Helpful • Entrepreneurial Personality 33 - Private Banking - Sep-14 - Capco confidential

34. BrandFor Private Banks, reputation operates on two critical dimensions -- quality assurance & affirmation status; delivering both is difficult Quality assurance Status affirmation Based on promises of future benefits based on today’s actions HNWI’s seek exclusivity • privacy • superior treatment • belonging • continuity/history • financial acumen • safety (i.e. large balance sheet) Universal bank groups Small private banks + + 34 - Private Banking - Sep-14 - Capco confidential

35. BrandThe attributes inherent in a Swiss pedigree is rich, powerful, well established and attractive across cultures Emotional prestige/ privilege timelessness Functional integrity cleanliness good design discretion equality intrinsic “Value” (genuine) innovation highest quality SwissEquity “customer care” efficiency security (unquestionable safety) legacy craftsmanship and precision long history/ longevity understated (not aggressive) intimacy 35 - Private Banking - Sep-14 - Capco confidential

36. BrandSwiss attributes can effectively drive competitive distinctiveness with the same clientele Example 1“Intrinsic value” Patek Philippe Tagline “Begin your own tradition” Enduring Timeless Quality -- so well made, it becomes an heirloom Promise • Ultimate Craftsmanship & beauty • Highest Swiss Manufacturing Standards • Super premium pricing (from $25,000) Support • Sophisticated • Authentic • Privileged • Understated Personality 36 - Private Banking - Sep-14 - Capco confidential

37. Strategic approaches

38. Umbrellaand/orsub-branddevelopment Locally relevantcommunicationstrategies Brand identity & communication development Customer“gap” analysis Customersegmentation Customerstrategy Steps to successCapco uses a highly structured customer demand-driven approach to user acquisition and retention Phase 1 Phase 2 Customer strategy Value proposition Customer datagathering Aggregateattitudinalcharacteristics Phase 3 Phase 4 Activation Measurement Integrated marketingstrategies & planning Marketresearchtracker Scenariomodelingtool Enterprise-wide implementation Brand Asses- ment Desiredbehavioral change 38 - Private Banking - Sep-14 - Capco confidential

39. • Brand Positioning • Detailed understanding of customer needs/wants and behaviors • Brand identity artwork & guidelines • Sub-brand structure and positioning • Demand driven customer segments • Advertising copy & campaign • Localized communication strategies • Assessment of brand - strengths & weaknesses • Integrated marketing plan, strategy, programs, • Purchase interest level budget & ROI analyses • Customer strategy • Purchase level • Phased enterprise-wide implementation plan and • prioritized segments programs • attitudinal “opportunities” • Market research protocol, program benchmark data set, and on-going analyses • desired behavioral change • estimate of segment “value” Steps to Success -- work plan Phase 1 Phase 1 Phase 1 Brand Assessment/Customer Strategy Value Proposition Activation/Measurement 6 -10 Weeks 8 - 10 Weeks 6 - 12+ Weeks Customer Insight Segmentation Brand Identity:name/logo/visual identity Develop & Evaluate Brand Positioning (if needed) Customer Advertising Copy Sub-brand Development Gap Analysis Strategy (if needed) Marketing Plan Localized Communication Strategies Brand Assessment Enterprise Wide Implementation Reco Market Research Tracker Business Objectives Product/Service & Strategies Value bundle Deliverables 39 - Private Banking - Sep-14 - Capco confidential

40. Who is Capco

41. actuals base case Operations & TechnologySolutions MarketInfrastructureSolutions Antwerp/Brussels BusinessInnovationSolutions London Frankfurt San Francisco Boston Paris New York envision engineer build operate invest Singapore DigitalProfessional Services Business Service Provider Leading Thoughts SoftwareComponents Ventures Capco Foundation Equity income Intellectual capital Fee revenue Licensing/renting revenue Transaction revenue Introduction to CapcoGlobal end-to-end solutions: A leader in ideas which transform the financial services industry Exclusive focus on end-to-end solutions for thefinancial services industry Global footprint Growth 65 470 650 800 Headcount Key shareholders Key clients Unique business model andthought leadership leveragedthrough pragmatic solutions Capital raised: $ 247 MM 41 - Private Banking - Sep-14 - Capco confidential

42. Strategic studies Market & competitive assessment Distribution channel planning Product planning & rationalization Customer wealth management strategy Customer segmentation and strategy Cost management & profitabilityenhancement Client & product profitability measurement Benchmarking Revenue enhancement Pricing strategy Securities lending strategy Cost management Infrastructure planning Pre- & post-merger integration Preparation for new product launch (ETFs, Alternative investments) Operations & technology “health check” (efficiency, effectiveness, capacity, scalability) Operations strategy & technology architecture • Portfolio mgmt • Trade order mgmt • Portfolio accounting • Client reporting • Transfer agency • Performance & attribution • Client billing • Financial planning models • CRM • Web portals • Online services • External interfaces • Auto-reconciliation Introduction to CapcoSolutions range from business strategy and process, to implementation • Implementation services • Selection & implementation of core & customer facing applications • Custom development • Partner integration services • Omgeo CTM -- central trade matching utility • Branding and Strategic Marketing Capco Solutions • FORSS -- fund order routing system • CAPS -- cost & profitabiity system • Reuters Joint Venture -- data cleansing and maintenance 42 - Private Banking - Sep-14 - Capco confidential

43. Biographies George Mark Feiger, Partner George Feiger is a Partner and Co-Head of the Private Client and Asset Management Group. Previously, George was a founder of N2F New Network Finance AG, an ASP company offering an integrated suite of wealth management applications to banks, brokers and insurers. He combined this with the position of director and head of risk management for II plc, an Internet incubator for early stage investments in B2B companies. Previously at UBS AG, George was global head of the private domestic banking division, which he designed and built. He initiated and implemented new strategies and business approaches and spearheaded the division’s acquisitions process. Prior to that, he was global head of investment banking and member of the executive board of SBC Warburg, re-establishing momentum and strategic direction in the corporate finance division. Previously a Director at McKinsey & Co., George focused on the acquisition of clients and the creation of ongoing revenue by introducing innovative strategies for new business practices. He started his financial career as head of environmental research & analysis at Bank of America. Before moving into the industry, George served as associate professor of Finance at Stanford University’s Graduate School of Business, and as a lecturer and junior fellow at Harvard University’s Department of Economics, where he graduated with a Ph.D. in Economics. George has been a frequent speaker for private banking business audiences, and wrote a widely used textbook on international finance. He also has considerable experience in advising non-profit enterprises (including the Golden Gate National Park Association and the London Zoo) on financial survival and growth strategies. 43 - Private Banking - Sep-14 - Capco confidential

44. Biographies Nick Hahn - Partner Nick Hahn is a Partner and heads the Branding and Strategic Marketing practice globally for Capco. He brings to the firm an impressive track record of business development, business strategy and strategic marketing experience, and has strong organizational and thought leadership skills in developing and implementing global business and brand strategies. Over the past eighteen years, he worked with leading corporations such as, The Coca Cola Company and before that, Johnson & Johnson/McNeil Consumer Products Company, where he held the positions of Global Director, Strategic Marketing, and Director, New Products/Business Development, respectively. At The Coca-Cola Company, Nick successfully led the first-ever development of global business and brand strategies for three of the company’s new business lines. Nick also managed Coca-Cola’s interests in their joint venture with Nestle and led M&A activities together with Business Development. He was and continues to be a member of the Harvard Business School-sponsored “Mind of the Market Lab”, a think tank which investigates latest marketing concepts and their applications. Prior to this, Nick managed the global analgesic (pain relief) business for Johnson & Johnson, and led the development of successful long-term advertising strategies and campaigns for leading brands at Saatchi & Saatchi Advertising. Nick studied at Middlebury College in Vermont, where he earned a B.A. in English, with Honors. Shahin Shojai, Managing Principal Shahin Shojai is a Managing Principal and Director of Strategic Research within the Capco Institute. Prior to joining the company, Shahin was President and CEO of WRA Group, a research and advisory firm focusing on financial needs of treasurers and CFOs of some of the world’s largest and most respected corporations. Before that, Shahin was Director of the European Institute, a think tank for CEOs of the 92 largest institutional asset management firms in Europe and North America. He has also consulted for highly respected financial institutions in the fields of Risk Management, Mergers & Acquisitions, Asset Allocations, and Corporate Finance. In addition, Shahin has held visiting or full professorial appointments at renowned academic institutions around the world, including London University, Boston University, Paris Graduate School of Management, Universite Paris-Dauphine, and Syracuse University. Shahin holds a Ph.D. in Finance & Economics from the University of Nottingham, and an M.B.A. in Finance from City University Business School. 44 - Private Banking - Sep-14 - Capco confidential

45. Nick Hahn Partner, Chief Marketing Officer T + 212 284 8808 F + 212 284 8623 Mobile + 917 962 2909 nh@capco.com Shahin Shojai Managing Principal T + 44 207 367 1321 F + 44 207 367 1001 Mobile +44 7789 981 534 shahin.shojai@capco.com George Mark Feiger Partner T + 212 284 8811 F + 212 284 8623 Mobile + 1 646 824 0135 george.feiger@capco.com Capco 120 Broadway, 29th Floor New York, NY 10271 USA T +1 212 284 8600 F +1 212 284 8623 www.capco.com Capco Clements House 14-18 Gresham Street London EC2V 7JE United Kingdom T +44 207 367 1000 F +44 207 367 1001 www.capco.com Capco 120 Broadway, 29th Floor New York, NY 10271 USA T +1 212 284 8600 F +1 212 284 8623 www.capco.com Selected contacts 45 - Private Banking - Sep-14 - Capco confidential