MIKAEL MUNCK GLOBAL HEAD OF TECHNOLOGY AND OPERATIONS

AGENDA – LEAN INNOVATION I SAXO BANK

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• WHO WE ARE

• HOW CAN I MAXIMIZE SPEND ON NEW DEVELOPMENT / INNOVATION

• WHAT WE DID

• HOW IT AND BUSINESS WORK TOGETHER AT SAXO BANK

• MODEL FOR LEAN AGILE ENTERPRISE

• INNOVATION @SAXO BANK

• TRADINGFLOOR.COM

• OPEN API

• INDUSTRY TRENDS

• Q & A

SAXO BANK FACTS

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EMPLOYEES >1300

NATIONALITIES 59

SPOKEN LANGUAGES IN THE BANK 40

OFFICES 25 countries

NO. OF FX TRADES PER DAY 170,000

MAX NO TRADES/SECOND >1200

DAILY AVERAGE TURNOVER 100 billion DKK

NO. OF COUNTRIES WITH RETAIL CLIENTS 190

SAXOTRADER LANGUAGES 25

GROSS PROFIT <15 øre per 1,000 DKK traded

FINANCIAL INSTRUMENTS more than 30,000

RECEIVED PRICES PER DAY 5-6 billion

MULTI ASSET TRADING PLATFORM

SAXO BANK BUSINESS MODEL

6

PROVIDER

OF PRICES AND

PRODUCTS

SAXO BANK

CLIENTS

12Large International Banks

50Exchanges

NASDAQ, NYSE, OMX, LSE, GLOBEX,

EUREX, ETC.

25Other Trading Facilities

CHI-X, TURQUOISE, ETC.

SAXO BANK’S

ONLINE

TRADING

PLATFORM

Private

White Label Clients

BANKS, BROKERAGES, ETC. USING SAXO

BANK’S TRADING PLATFORM

Institutions/Corporates

ASSET MANAGERS, FINANCIAL ADVISORS,

INTRODUCING BROKERS

LEAN INNOVATION – GREEN FIELD VERSUS ENTERPRISE

How much of my budget can I spend on

new development versus maintenance ?

How do start-up succeed and why do

established companies fail ?

What we have done at Saxo Bank

LEADING QUESTION

How do I connect the dots, thriving towards a optimal framework for new

initiatives and innovation - rather than just controlling and managing the chaos !

ANSWER – WHAT WE DID

Establish Frameworks and Principles (order in chaos) Way we are organized

Way of thinking

Way of modeling and working

Way of executing and prioritizing

Connect to Saxo Bank Strategy Tied initiatives and definitions to company values

Loyal to Agile Manifesto

Continuously Delivery (mindset) Less focus on the model initially – daunting tasks

Minimum Viable Product

Learning from EA discipline -> Principles -> Manifesto

The Saxo Way of Working – a way for Business and IT to collaborate on projects

Underlying 7 Principles of The Saxo Way of

Working

1. Agile Mindset – not Waterfall

2. Collaboration model – not a Governance model

3. Handshakes – not Gates

4. Faster time to market – not processes and

tools

5. Rationality – not theoretical

6. Clear Roles and Responsibilities

7. Designed for and by Saxo Bank

The Saxo Way of Working:

• Is a collaboration model

• Is a service approach – the underlying value is

“We are here to help!”

• Is the Business Analysts Tool Box to help Business

and IT in projects

• Is about Handshakes

The Saxo Way of Working

The Saxo Way of Working

z

Qualify Execute

Value case

Project

Board

BA

Group

Business

Analyst

Product

Manager

UAT & Sign

off

Enterprise

Architect

Product Delivery Manager

Develop

the Bank

IT

Strategic

Projects

Align

Capture

- Value

proposition

- EMG “idea”

Sponsor

IT

Business

Run the Bank

(IT) IT Operations

Handover

Hyper careDevelop

Test

& r

ele

ase

Run the Bank

(Business) Commercial Market Operations

Roll-outEducate & prepare

Qualify ExecuteCapture Handover

Sales

Business Owner

Business

Requirements

BA

IT Project Manager

Coordinate throughout the project

Commercial

Markets

Operations

Finance

IT

#2 - CONTINUOUS DELIVERY

More than a way or releasing software

on a daily basis:

- A common mindset of continuously

improving

- A way of setting high ambitions

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MVP/Feature Delivery PackageDeliveriesWhat is NOT includedResponsibilities (who does what) -including documented manual procedures• Markets• OPS• Other StakeholdersTracking and Feedback Loop• Ensure MVP tracking

• Internal• External

• What are the success criteria• Measurable!

Program/Initiative

Dev

elo

p MV

P

Feature

MV

P

Feature

MV

P

Feature

MV

P

Feature

MV

P

Feature

MV

P

Feature

MVP – Minimum Viable Product• Mindset/process to produce the

smallest, simplest cheapest product increment that can start build-measure-learn loop

• Provide incremental business value• Max 3 man-months duration• Small team• Quantifiable learning outcome

Analysis DesignDevelopment

TestDeployment

#3 - MVP – DEVELOP/EXECUTE CYCLE

More than improving efficiency:

- A mindset of experimenting

- A way of enhancing dialogue

with clients

CONNECTING THE DOTS

Agile on a Enterprise level

LEAN AGILE ENTERPRISE

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Minimum Viable Product

The minimum required changes, which proves a hypothesis (a claim) so validate further investments in refining idea / product

Product Delivery Model

Efficient feature driven execution in small batches and metrics

Continous Delivery

Minimize cycle time from a feature is committed until it is released in production – through ruthless automation

FeatureFeatureFeature

Lean/agile enterprise principles• Work in small batches/iterate• Build measure learn• Continously improve• Quantifiable learning• Reduce waste• Minimize cycle times

Minimize cycle time from idea to learning/verification

SO ARE WE DONE YET……

The Saxo Way of Working -> Product Delivery Model

Continuously Delivery – not in all projects / teams – but we are getting

there

Minimum Viable Product - feed-back loop all the way to clients, only

partly there

SAXO BANK AND INNOVATION

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• FIRST RETAIL FX BROKER

• PIONEERED WHITE LABEL MODEL

• AWARD WINNING PLATFORM AND

INFRASTRUCTURE

• TRADINGFLOOR

• OPEN API

TRADINGFLOOR

Top Traders List

(social trading)

VIP Blogs

Instrument Sections

Saxo TV

Trade Views

Price Charts

News

Most Traded

Instruments

Editor’s Picks

Sentiment watch:

Open

orders/positions

Analysis & Models

Financial Calendar

Research and

Publications

TRADINGFLOOR - LEADERBOARD

TRADINGFLOOR – LEADER PERFORMANCE

888% profit

TRADINGFLOOR – COPY A TRADE

OPEN API

MORE ON OPEN API

OPEN FIRST

“On the back end side, we’re providing a

way to connect with other ecosystems

“A lot of people talk about ‘mobile first.’

Well, in our case we’re thinking ‘open

first’ for all future……..

…….we want people to be able to create

experiences that we can’t, niche

experiences for an audience that we might

not be addressing directly.”

SAXO BANK - OPEN API TEST PROJECTS

Project X1

Have written code which call the portfolio API’s to get better (more detailed) information about client

positions

Project X2

Working on a CFD mini trader

Project X3

Are developing a “Automated Managed Fund solution”

Project X4

Wants to deliver an options strategy platform as a supplement to Saxo Trader

Project X5

Will integrate elements of Saxo functionality with their current infrastructure to:

– Get better differentiation

– Get a better/broader offering than the competitors

Project X6

Very advanced Chart Package. Would like to co-develop a chart interface

– current interface for internal use only……

Continued focus on cost and core competitive differentiators

- Regulatory and Compliance burdens only increases

Legacy in IT infrastructure is becoming evident and visible to everyone

- No quick fix

- Tech. companies want a share of the pie

Disruption is hurting existing revenue channels

- Hindering for real innovation

Solutions

- New ways of thinking

- New partnerships

- Technical excellence

- Learn from other industries

- Sharing

INDUSTRY TRENDS – BANKING IS BEING DISRUPTED

THANK YOU