COMPANY THE. Unicre - Instituição Financeira de Crédito, SA

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2 THE COMPANY Unicre - Instituição Financeira de Crédito, SA Is a financial institution specialized in : issuing and managing payment cards as well as other credit products; managing payment cards acceptance networks (perform as acquirer) for all major international payment brands; managing other financial and non-financial institutions cards (credit, debit and pre-paid) portfolios. Unicre was created in April 1974 with the purpose of developing the payment cards business in Portugal In 2006 became a licensed Credit Financial Institution, authorized to perform the same activities of a bank except for the acceptance of deposits.

3 THE SHAREHOLDERS 12 banks including the top 4 private banks operating in Portugal own Unicre and represent 69% of the total volume of domestic cards transactions. Banco Comercial Português (Millennium bcp) Banco Santander Totta Banco BPI 91,7% Novo Banco Caixa Económica Montepio Geral Banco Internacional do Funchal Banco Bilbao & Vizcaya Argentaria Banco do Brasil AG Caixa Central de Crédito Agrícola Barclays Bank 8,3% Banco Popular de Portugal Banco Activo Bank

4 Unicre's business is centered in four major areas: Our Business Lines the issue and management of CREDIT CARDS providing PERSONAL LOANS provision of services associated with ACCEPTANCE OF PAYMENTS using cards, particularly acquirer services in respect of international brand cards. providing SPECIALISED SERVICES to financial institutions, within the scope of payment-card transactions. CREDIT CARDS PERSONAL LOANS ACQUIRING SERVICES

5 CREDIT CARDS ACQUIRING PERSONAL LOANS SERVICES CREDIT CARDS More than CARDS issued under international payment brands Visa and Mastercard INNOVATIVE CARD FEATURES as installment payments, extended credit line, loyalty programs and campaigns, automatic savings, etc. Portfolio of OVER 50 DIFFERENT CREDIT CARD PRODUCTS including, Gold, Classic, Prepaid, Internet only cards and Co-branded cards with retailers, financial institutions, insurance companies and associations. UNIQUE HOMEBANKING service including spending management features, usage monitoring, alerts, payment transactions, etc.

6 PERSONAL CREDIT PERSONAL CARDS LOANS LOANS ACQUIRING SERVICES Extensive offer of PERSONAL LOAN SOLUTIONS: Personal loans for various amounts, maturities and destinations Customer credit consolidation Transfer Credit Card s available balance to a bank Cash Account Installment plans Cross-selling with insurance plans

7 CREDIT CARDS ACQUIRING PERSONAL LOANS SERVICES ACQUIRING Acquiring of MasterCard (1974), Visa (1982), Diners Club (1979), JCB (1986), Euro 6000 (1996), Discover (2009) and UnionPay International (2015) An established network of MERCHANT LOCATIONS and terminals; Around 85% MARKET SHARE of total International schemes card transaction volume; INNOVATIVE POSITIONING reinforced by the ability to launch pioneering products and services in the Portuguese market: DCC (Dynamic Currency Conversion) Integrated Payment Solutions for T&E Taxi Card (low value solution for cabs) E-Commerce platform for secure payments. Tax Free Service, etc. Distribution Card (a card for retailer merchants) 345 MILLION TRANSACTIONS acquired worth 14,3 billion in 2013; CROSS BORDER acquirer in Spain

8 ISSUING CREDIT PERSONAL CARDS LOANS SERVICES ACQUIRING SERVICES Issuing and managing over PAYMENT CARDS for Domestic and International operators (in Malta and Angola). END-TO-END CARD MANAGEMENT SERVICES, including: Issuance and personalization services; Card management support services (Cancellations, Statements management, Card Account maintenance, etc.) Disputes resolution services; Fraud detection and management services, DEDICATED SUPPORT TEAMS highly specialized in payment cards.

9 THE Market Over 32 billion Euros transacted in ,9 Million debit and credit cards outstanding in 2014 Over 266k POS in place International schemes (VISA 64%, MC 29%, ) compete against domestic scheme (Multibanco) International schemes 57% Domestic scheme 43% The overwhelming majority of cards are co-branded with the domestic scheme Unicre is the leading acquirer of international schemes (83%)

10 THE Market Visa / MC Only (4%) 100% 19,9 Million Cards 100% 266k POS (46%) Unicre, Amex and other Networks Co-branded Cards (MB + Visa / MC/ Amex) (95%) (54%) Banks Networks MB only (1%) Issuing Acquiring

11 THE Market Volume of Transactions by Type Debit vs Credit Volume of Transactions by Origin Domestic vs Foreign

12 Unicre & Openway Business Case What made the project successful

13 UNICRE Transformation Program this project represents the biggest challenge and transformation program Unicre has ever faced in it s existence (since 1974) it covers almost 100% of existing business support applications, meaning that Unicre will need to evolve the majority of it s business processes (acquiring, issuing, card management and loans) as well as support processes with impact in staff. Unicre Board Member and Sponsor of The Transformation Program (Sep 2011) the most complex and challeging project Openway as ever faced! Alexander Dorofeev Openway (Sep 2011)

14 The project Scope and Rational To have a new and single core application for all business areas CREDIT CARDS PERSONAL LOANS To have the means and the competences to deepen and extend current business lines, domestic and cross-border ACQUIRING SERVICES To be able to provide more competitive card management services to financial and non-financial organizations ; Reap the benefits of having a strong and competitive position supported by: economies of scale, flexibility, scalability and a best-of-breed solution

15 The Project Perimeter This is a very simplified version that clearly represents the transformation program perimeter as well as the ambition and commitment that Unicre and Openway have brought to it. No single application, interface, channel ( ) will stay untouched with the purpose to implement the initial vision of having a very competitive, integrated, robust and truly efficient business enabler system.

16 The Project Complexity A program with too many projects running at the same time, with too many providers working concurrently and depending from each other all this with tight schedules, demanding deliveries and business as usual to be developed and supported. A transformation program too much dependent from Openway pace of implementation and delivery as well as too much optimist. When this complexity was better understood, addressed and simplified, project increased speed of delivery and, we can say, started to become successful.

17 What We have accomplished Acquiring project Sep 2013 went live running in parallel with legacy system (business was processed on both systems); Jan 2014 New system in production with acquiring business being moved to Way4 in a big-bang approach; Key evolutions were/are being performed (UPI, Cross-Border acquiring and DCC for a new processor) Issuing Project Sep 2014 went live for family & friends allowing us to issue a few green field credit cards to confirm new system (Way4) core functionalities and increase support capacity; Fev 2015 First migration of real cards to Way4 with success and no impact on customers card usage (Transparent to Customers); Jun & Oct 2015 Planed migrations with all sort of Unibanco cards and loans functionalities and services.

18 Key Lessons Learned This is not a recipe for success, as this was not always the case. Nevertheless here are a couple of lessons learned that, when applied, may produce better results: Define/Redefine upfront, clear and realistic goals that can be achieved; Share information and consult key stakeholders (including Openway) as much as you can and incorporate their input (namely from Openway); Make sure you have the right staff to execute (in competences and number) and committed; Create a positive atmosphere for project implementation and system support (Openway as well as other key providers are now our best friends and partners); Focus on execution and in getting things into production. New functionalities will be delivered there as well as minor corrections at a faster pace; Phased deliveries and partial migrations proved to be a better option.

19 Key Messages to retain Unicre Payments industry specialist in Portugal since 1974, with acquiring, issuing, consumer credit and card management business lines; Owned by the banks that represents 69% of the total volume of domestic cards transactions. Unicre Openway Project Way4 is the core system for all Unicre business lines and Openway Unicre s key partner and provider; Since Jan 2014 Way4 is fully supporting acquiring business and key evolutions are underway (UPI, Cross-border and DCC); Issuing is live and first cards were migrated in Feb New migrations waves will follow in June and October.

20 Luís Gama IT Operations Contact Center