Louis Hernandez, Jr.May 16, 2011

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Collaboration: Leveraging the Power of Community

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Accelerating Global Change

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Housing starts at historic lows

Home values depressed

Foreclosures up 2%

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3.2% GDP growth in 2011

Retail sales up 6.5%

Unemployment still high at 8.8%

The fastest distance between 2 points

A guy walking a tight rope

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Margin Compression

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Channel Proliferation

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ExpandedMarketplace

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52%

Operating Expense (Since 1995)

64%

Compliance (as of 2009)

208%

Loan Loss Provision(Since 1995)

Costs have Increased

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Source: Raddon Financial Group, March 2011

Regulatory Compliance Burdens Small FIs

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Industry Consolidation Continues

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thereHave

Beenchallenges

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Big Five Dominance

37% of U.S. Deposits

20% of Branches

60% of Assets

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Consumers Prefer Community Banks and Credit Unions

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Position To Win

Incr

ease

Rev

enue

Reduce Costs

Technology

Customer Intelligence

Manage Channel Proliferation

Mitigate Regulatory Burden

Increase Non-Interest Income

Diversify Revenue

Technology Impact

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Now’s the Time forCollaboration

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We’ve Seen the Enemy and it’s Not each other

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Open Sourcing

Crowd Sourcing

Communities

Internal Sourcing

Shared Sourcing

Collaboration Alternatives

Controlled

Distributed

CO

ST

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Collaboration in Technology

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Collaboration in Technology

Collaboration in Technology

“Customers can get faster enhancements cheaper … competitors with legacy systems will have some

difficulty emulating, given the architecture of their systems.”

-- Bart Narter, CELENT

“About 70 applications have already been posted on the marketplace, called DNAappstore, most of them built by bankers and resellers.”

“…the technological innovation among its client

base and beyond can now be shared in ‘ways that are a

mind-bending change for our industry.’”

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Embrace Your Opportunity

Follow Me:

www.facebook.com/toosmalltofail

www.linkedin.com/in/louishernandezjr

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www.opensolutions.com