Information Management and Transaction Services

Transcription

1 Information Management and Transaction Services 80 Our information management activities in 1999 focused primarily on migrating the HypoVereinsbank branch system to a single new bank-wide platform. In fact, we accomplished the technological requirements associated with the merger in record time, while also carrying out a number of customer-oriented process improvements. Our customers now enjoy the combined advantages of a dense network of modernized branches together with a broad spread of conveniently-located ATMs. As for Y2K preparations, we completed the necessary work well on schedule, while keeping the cost to a manageable level. We continued to systematically optimize our technology infrastructure, and also entered into a strategic cooperation agreement with SAP that will give us the wherewithal to develop and introduce new bank controlling systems. We intend to concentrate the transaction services we offer in the Financial Markets Service Bank with a view to providing alternative offerings on the Internet and making them available to the market.

2 » The Internet is changing consumer habits radically. Innovative service offerings and our multi-optional approach to sales will help us achieve a leading position in the e-business marketplace.«dr. Eberhard Rauch Board member

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4 BANK-WIDE PLATFORM ENHANCES EFFICIENCY BRANCH MIGRATION CREATES COST SYNERGIES AND PROCESS IMPROVEMENTS The harmonization of HypoVereinsbank's information systems, successfully completed in 1999, was the largest project of its kind in German banking history. In less than eight months, about 1,000 facilities were supplied with new technology and more than one million accounts were transferred to the new system. With the successful completion of this work, we laid the technological foundation enabling us to realize merger synergies projected to save half a billion euros by At the same time, HypoVereinsbank s customers enjoy the combined advantages of a dense network of state-of-the-art branches operating on the same technology basis and a conveniently-located spread of ATMs. Innovative controlling In addition to the branch migration project, we established a common systems platform for our headquarters and brought all our security systems under a single controlling system. By consolidating more than 150 different computer systems under the Windows NT platform and adapting them to the needs of the new bank, we created an innovative technological infrastructure available for use by all divisions and companies of the Group for controlling the Bank's business and operations. The Bank's intranet system, which already receives more than 4.6 million visits each month, is fast becoming established as the in-house information hub of choice, replacing the formerly prevalent print media. The in-house system is also intensively used by our employees. In addition to systems integration work, we also invested substantially in modernizing our computer systems and telecommunications infrastructure. In all, the Group invested some 917 million in information technology in 1999, compared with 776 million in TOTAL CAPITAL SPENDING ON INFORMATION TECHNOLOGY millions Infrastructure and service units 444 Vereins- und Westbank 74 Other domestic and foreign Group companies 181 Corporate divisions and other parent bank 218

5 SMOOTH TRANSITION TO THE NEW MILLENNIUM We not only completed our Y2K preparations on time, but we also managed to do so with the industry's lowest costs in relative terms of only about 50 million over the entire changeover period, posted to operating expenses. The tests conducted during the course of 1999 created a sound basis for the transition. All our programs were Y2K-compliant by the end of June In the crucial days from 30 December 1999 to 4 January 2000, we monitored all our systems from a control center set up especially for this purpose. Everywhere in the Group, the transition went off smoothly. Faster payment processing MULTIWEB OPTIMIZES MONEY TRANSFER OPERATIONS FOR CORPORATE CUSTOMERS Internet-based electronic transaction processing makes it possible for companies to harmonize all their business processes, from production and delivery to customer service. Payment processing is an important element of this process. The MULTIWEB platform, developed by HypoVereinsbank at the head of a team including other companies as well, serves as an interface between our accounting systems and those of our customers. It simplifies the processing of money transfer operations while meeting strict security standards. 84 In parallel with these developments, we extended the line of products we offer in the international clearing business. In September 1999, we joined the Euro Banking Association (EBA) clearing system so that we can offer cross-border money transfer services in the euro-zone. Through our participation in IBOS, a strategic alliance of leading international banks, we at HypoVereinsbank are able to offer transaction services throughout the euro area. Our customers benefit from faster money transfers and more efficient cash management.

6 We have responded to the special security needs of our private customers and professionals by introducing a new money transfer system based on the especially strict HBCI (Home Banking Computer Interface) standards. We intend to enhance security further during the course of 2000 by introducing new programs for processing securities transactions. E-BUSINESS: STANDARDS CREATE SOUND BASIS FOR WORLDWIDE EXPANSION E-business is among the fastest-growing sectors in the world economy. Many businesses, however, have grave reservations related to the security of electronic transactions. Leading-edge financial institutions can build a strategic advantage by establishing themselves as the guarantors of the security and reliability of electronic transactions. Together with other major banks, we founded New York-based Identrus in The consortium, which has since grown to include twelve international financial corporations, has established a worldwide standard for digital signatures. This technology enables our customers to do e-business all around the world on a firm legal basis. In 1999, in collaboration with the three major Frankfurt-based German banks, we acquired Hamburg-based TC TrustCenter, which had already established a strong market presence. This acquisition provided us with the infrastructure required to issue Identrus certificates. Software developed in-house boosts security SUBSTANTIAL IMPROVEMENTS TO RISK CONTROLLING SYSTEMS Sophisticated information systems are the most important guarantors of modern risk controlling. Having invested substantial sums to upgrade these systems, we have made considerable progress in this area, including an exhaustive new system to monitor market risks. Borrower risks are monitored using a software program developed in-house specifically for our needs. The program computes up to 16,000 scenarios on the basis of a portfolio model. To manage property risks in the full range of real estate we finance, we will first develop an underlying valuation methodology that is integrated in the portfolio model system. 85 OUTLOOK: CREATING A NEW AREA OF CORE COMPETENCE Information management helps to increase efficiency and enhance the value of a company. We intend to develop this field into a market-oriented area of core competence for the Bank, with the aim of further boosting profitability. The transformation of some units from cost centers to profit centers will tap significant efficiency gains in this area.

7 Networked information technologies are a key factor in achieving a competitive edge. HypoVereinsbank is using this foundation to develop an electronic media net known as System E. The modular design allows this innovation to be implemented throughout the Group. Conceived to handle capacity in excess of 10 million customers, the system takes into account local factors like language, reporting, and accounting. System E forms the backbone for the success of expanding our bank of the regions in Europe strategy. 86 Strategic cooperation with SAP New transactionbanking subsidiary We were the first German bank certified by SAP as a Customer Competence Center, enabling us to improve the support services we provide to our subsidiaries around the world. At the end of 1999, to support our System E development, we entered into a strategic cooperation agreement with SAP to produce an internationally usable system for monitoring banks and other providers of financial services. By deepening our involvement in this cooperative venture, we will be able to integrate new market segments more easily and respond more quickly to market opportunities. Moreover, we intend to step up our e-business activities. Last year we began to develop applications utilizing chip cards based on digital signature techniques. We will use this technology to upgrade our Internet presence, providing more information about the Bank and building up an infrastructure for e-business transactions. Innovative solutions such as a scalable Internet platform, the introduction of efficient content management techniques and customization technologies, are currently in the process of being implemented. We will increasingly market our transaction services under our own brand. With this in mind, we have amalgamated the activities of Probank and the FMS unit to form Financial Markets Service Bank GmbH, whose mission it is to offer transaction banking (meaning handling services relating to securities and payment transactions) as a profit center both inside and outside the Group. Such services are already very much in demand, notably from new banks on the Internet.

8 Environmental Management Our attention in 1999 was devoted largely to introducing a new environmental management system. In terms of product ecology, our ethical investment products performed well on the market, while we also optimized the ecological impact of our operations. Finally, we plan to extend the range and scope of our environmental controlling activities to conserve natural resources, thus also cutting costs. 87

9 SUSTAINABILITY MEANS GREATER EFFICIENCY PRODUCT ECOLOGY: OUR ETHICAL INVESTMENT PRODUCTS OUTPERFORM THE MARKET We were the first bank in Germany to issue an index certificate on the Dow Jones Sustainability Group World Index. The index, comprising companies that exemplify the principles of sustainable development, satisfies the rising demand for high-yield investments in companies that conserve natural resources. The strong performance exhibited by the Sustainability Index demonstrates how companies applying the principles of sustainable development are capable of achieving outstanding results. Successful ethical fund Moreover, HypoVereinsbank continues to offer the Activest Lux Eco Tech Fund, investing in environmental technology companies, as part of its portfolio of investment fund products. The environmental management systems of the companies in which the fund invests are all rated aboveaverage in quality by EIRIS, an environmental rating agency. Over the last five years, Activest Lux Eco Tech has outperformed all the ethical funds currently on the market. 88 OPERATIONAL ECOLOGY: PROJECTS BEGIN TO YIELD RESULTS HypoVereinsbank concentrates on programs upholding procurement standards for expendable supplies and materials, reducing paper consumption, and above all establishing effective environmental controlling capabilities. In 1999, we developed a waste disposal concept devising a uniform separation system for all HypoVereinsbank facilities in Germany while also optimizing the handling of reusable waste materials. The Bank began to implement this concept in stages at all its offices in December OUTPERFORMANCE OF THE HYPOVEREINSBANK SUSTAINABILITY INDEX CERTIFICATE 400 Dow Jones Sustainability Group World Index MSCI World Index Dec

10 Environmental management prize ENVIRONMENTAL MANAGEMENT: COMMUNICATION FOSTERS NETWORKING Our environmental management program is based on the formation of decentralized networks. The environmental network established in 1998, the year of the merger, unites offices and departments in all the Bank s corporate and service divisions. The members of this network act as review partners and opinion leaders for the implementation of the environmental management system. Taking the results of a survey of customers, shareholders, environmental experts and employees as a basis, we developed an environmental mission statement stipulating the requirements, goals and measures of our environmental policy. This statement serves as the authoritative basis for our environmental management system, which was rated number one among German banks in a study published at the end of 1999 by Ökom, an environmental rating agency. Our commitment to social responsibility as evidenced by our contributions to the task force known as Munich Financial Industry and Local Agenda 21 was also honored with the Munich Environmental Prize in December OUTLOOK: ENVIRONMENTAL REPORT HIGHLIGHTS SUSTAINABILITY Environmental controlling is a vital instrument for monitoring our operational ecology program. We intend to further optimize our controlling program by applying the 80:20 method, which means optimizing 80% of our consumption of natural resources such as energy, waste and paper by analyzing and monitoring the biggest consumers of these resources, which account for 20% of our facilities. In this manner, we can achieve the greatest possible impact while keeping the related costs within reasonable limits. 89 Ecological controlling optimizes resource deployment HypoVereinsbank s first Environmental Report, to be published by mid-2000, will be guided by the principles of sustainable development. In surveying and describing our product ecology and operational ecology programs, we also take the economic and social impact of such measures into account. The practical implementation of sustainability principles is not only ecologically sound, but ultimately more efficient as well.