Capital Market Day, Copenhagen, 29 June 2000

On-line BankingJohn Andersen

Senior Vice President e-Finance

Den Danske Bank

Agenda

Ø Current status

Ø Discussion of market challenges

Ø Danske Bank Initiatives

Den Danske Bank

Internet penetration (kommentar fra TDK)

0%10%20%30%40%50%60%70%80%90%

100%

Sweden Finland Norway DenmarkSource: Salomon Smith Barney

Does not use PC

Uses PC but not theInternet

Internet user

Internet shopper

Den Danske Bank

Customer status

Danske PC 64.500 Danske Netbank or both 129.600 Private customer agreements in Denmark 194.100 Customers covered by powers of attorney 62.900 Total private on-line customers in Denmark 257.000 Agreements in Norway 25.600 Agreements in Sweden 23.000 Total nordic private customers on-line 305.600

Business On-line agreements 11.700 Corporate customers covered by Business-Online agreements 12.600 Danske Netbank, corporate 25.000 Online corporate customers in Sweden 7.000 Online corporate customers in Norway 5.000 Total corporate customers online 61.300

On-line customers total 366.900

Den Danske Bank

Daily expansion of on-line customer base

New Danske bank on-line customers

0

200

400

600

800

1000

1200

1400

1600

1. maj 00 15. maj 00 29. maj 00 12. jun 00

Den Danske Bank

Development in distribution of agreements

Sale of pc-bank product discontinued in may 2000. PC-Bank expected to be closed in spring 2001

0%

20%

40%

60%

80%

100%

maj 99 jul 99 sep 99 nov 99 jan 00 mar 00 maj 00

Danske NetBank Danske PC

Den Danske Bank

Danske NetBank coverage in the privatecustomer segments

Measured as number of agreements to households. If alternatively measured by number of online customers includingpowers of attorney to the number of private customers (1,917,000) the coverage amounts to 13.4%

25,62%

7,20%

9,86%

1,09%

9,80%

12,80%

18,55%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

High value customers

Other core customers

Age below 25

Customers with lowtransaction volume

Avg. coverage DK

Avg. coverage NO

Avg. coverage SE

Den Danske Bank

Distribution of households

0

100.000

200.000

300.000

400.000

500.000

600.000

High valuecustomers

Other corecustomers

Age below 25 Customers withlow transaction

volume

Den Danske Bank

Ø Transfers of money to own accounts, other DDBaccounts and accounts in other domestic banks

Ø Bill paymentØ Export of account data to others software productsØ Loan, mortgage and credit card applicationsØ On-line ordering of products (insurance, new account

etc.)Ø STP trading of stocks, bonds and mutual funds on

Copenhagen and Stockholm ExchangesØ Currency trading for corporate clientsØ Order receival and confirmation for trading of shares

on 12 other exchangesØ Participation in IPOsØ Calculation of loan costs, life assurance need

etc.

Functions in on-line bank

Den Danske Bank

36%

31%

4%

4%

14%

3%8%

Standing orders/ PBS

Danske Bank TeleService

Telephone Banking, DanskeNetBank/ Danske PC

Manual

Cheques

Danske Giro

Payment forms

Transactions no accounts belonging tocorporate customers

Den Danske Bank

2%1%

71%

4%

6%

2%

14% Standing orders/ PBS

Telephone Banking, DanskeNetBank/ Danske PC

Manual

Cheques

ATM's

Danske Giro

Payment forms

Transactions no accounts belonging toprivate customers

Den Danske Bank

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

January February March April May

Retailbank total

Customers withinvestmentadvisor

Other customers

Share of security trading on-line

Den Danske Bank

Status - Private customersØ Retail online products are currently - apart from

investments - focused on payments services. Manuelpayments including checks only account for 9% ofpayments in Denmark. The highly automated traditionalsystem has delayed penetration of Internet banking

Ø On-line credit card payments are in Denmark today hand-led through PBS. Danske Bank has acquired the rights toAmerican Express in Denmark in order to build expertisebefore a more competitive structure emerges on the creditcard market

Ø The Financial Supervisory Authority is still studying ourrequest regarding ownership of a B-t-C exchange(focused on DDB customers)

Den Danske Bank

Status website / redesign

Ø First phase of redesign concluded 1 May. Mainsystems redesigned by 1 September in accordancewith name change

Ø DDB has despite the not yet concluded redesignachieved good rankings in last to Danish websitesurveys. 1st place among 300 top Danish corporates(Proffice) and 2nd place among Danish banks(Strand Consult)

Den Danske Bank

Status - Investment services

Ø For customers without an assigned investmentadvisor online trading today account for a significantshare (25%) of total trading

Ø Customers with investment advisors still prefer totrade through retail trading desks. This may of coursechange if the pricing structure is changed

Ø The newly introduced corporate product - DanskeMarkets - including securities and forex trading havebeen met with very high interest from clients

Ø DDB has not yet experienced any noticeable loss ofcustomers to discount brokers.

Den Danske Bank

Business to business / cash management

Ø Den Danske Bank´s branches in Denmark, Sweden,Norway, Finland, Germany and the UK are fullyintegrated with the Banks central computer systemsfor real time processing.

Ø The product includes liquidity overview,(MultiCurrency) Interest Netting, Cash Pool andformat translator.

Ø Offer virtually all types of local payments. Localcash management is also available

Den Danske Bank

Branches in Den Danske BankDenmark Sweden Norway Finland United

KingdomGermany USA

Danske Bankestablished inthe country

1871 1984 1995 1995 1983 1985 1983

Branch Yes Yes. AlsoÖstgöta En-skildaBank network,39 branches

Yes, AlsoFokus BankNetwork,70 branches

Yes Yes Yes Yes

Domesticpayments

All types All types All types Virtuallyall types

All types All types Fedwire andCHIPS

Interest Nettingand Cash Pool

Yes Yes Yes Yes Yes Yes Yes

Office bankingsystemavailable

DBTS DBTS DBTS DBTS, OPUSCAPITA andANALYSTE

DBTS DBTSMulticash Plus

DBTS

Office bankingsystemlanguage

Danish Swedish Danishor English

Finnish(Multibank),Englishor Swedish

English German(Multibank) orEnglish

English

Help desklanguage

Danish Swedish Danishor English

English English English English

On-site ITsupport

Yes Yes Yes Yes Yes Yes No

Den Danske Bank

Before the name change

Danskebank.dk

Danica.dk

Nordania.dk

Forenedefactors.dk

Danskebo.dk

Danskekredit.dk

Danskeinvest.dkDanskejob.dk

site4you.dk

Merchantbank.dk

Mastercard-services.dk

Danskebank.com

Fokus.noDanskebank.lu

Danskebank.co.uk

Danskesecurities.dk

öeb.se

dbts.com

Den Danske Bank

Online branding strategydanskebank.dk

danskebank.com

danica.dk forenedefactors.dk danskebo.dknordania.dk

danskesecurities.com

fokus.no

Online Business Online

Business PC

oeb.se

Den Danske Bank

One Group – One System

Den Danske Bank

One Group – One System

Group Data

Security

Group

System

System Markets

New areas

Asset Man.

Life &Pension

Retail

Wholesale

Securities

Products

Leasing

Channels

New channels

WAP

Telephone

Offices

Branches

Internet

Call Center

Den Danske Bank

Planned scenariou All users (customers, employees, partners

etc.) log in to an enterprise WEB/VML rolebased portal (my portal), from where theyflexible have access to all the services theyneed.

u Secure realtime access to all componentsinside Den Danske Bank from anywhere(B2B)

u Östgöta fully integrated 1/10-2000u Fokus fully integrated 1/10 2001

Den Danske Bank

Agenda

Ø Current status

Ø Discussion of market challenges

Ø Danske Bank Initiatives

Den Danske Bank

Impact of the web

Buy side

Procurementthroughexchanges

Participationin specialisedexchanges forfinancial pro-ducts (eg. cur-rency options)

Inside

Use of Intranet toimprove workflowand communication

Improve develop-ment processesthrough integrationof Intranet andInternet

Sell side

On-line banking,brokerage andinsurance

Distribution ofresearch etc.

Extranet services

Financial servicesfor online exchangesetc.

DDB main focus has so far been sell side. Organisational change aimed atstrengthening focus on internal processes

Den Danske Bank

Competition parameters

Customer experience Functionality and content

User friendliness

Contact opportunities and quality

Price / value

Operations Economies of scale

Level of STP transactions

Time to market

Strong e-commerce position

Den Danske Bank

Business to business

Ø We believe a strong cash management productis a necessary basis for a strong business-to-business online offering

Ø Online exchanges will take over a substantialpart of transactions between businesscounterparties. A substantial part of financialtransaction will be initiated through exchanges

Ø A key success factor for commercial banks willbe to identify value added services which canimprove customers possibility of achieving costefficiencies in an ebusiness world

Den Danske Bank

Retail banking

Ø The product best able to create loyalty is a fullydeveloped budget account with bill paymentand presentment, accoutn transfer, budgetreconsiliation, attached credit card and loanopportunity

Ø Customer loyalty can further be developed byinteresting content including various offersfocused on the various customer groups.

Ø High quality requires a full integration acrosssales channels including branches and callcenter

Den Danske Bank

Investment Services

Ø Investors are met with so massive amounts ofcontent that the primary concern is relevance

Ø It requires substantial effort to target theresearch and information produced by the bankat specific customer groups

Ø The cost of international share trading act as alimitating factor on trading volume. STP in thisarea is a key success factor in order to be ableto lower commissions without reducing profit

Den Danske Bank

Operations

Ø The rationalisation associated with further use ofwebbased service by clients cannot be separated fromthe general rationalisation efforts included inCentralisation Project 2000

Ø The rationalisation target for 2001 (hvad er det?) ispartially founded on rationalisations through furtheruse of flexible Intranet services and through reducedmanual transaction volumes through generally higheruse of webbased services among customers

Ø The new Process Development organisational unitwill have as a key part of its charter to reduce time-to-market and improve STP quality of all new systems

Den Danske Bank

Agenda

Ø Current status

Ø Discussion of market challenges

Ø Danske Bank Initiatives

Den Danske Bank

New organisational structure for operations

Strategy & Financial InfrastructureCarsten Høegh

e-Finance & Product DevelopmentJohn Andersen

s. Klaus Frandsen

Process DevelopmentPeter Trier Schleidt

s. Einar Rud Pedersen

Business SystemsArne Løcke

s. Erik Andreasen

Core Systems & Technological InfrastructurePoul Ellerød Andersens. Jørgen Lundgaard

OperationsBjarne Helvig Nielsen

LogisticsUdo Christiansens. Troels Heide

Group Service CentreJørgen Klejnstrup

Hans E. Mørk

Target for new organisation:ã to strengthen focus on Process

Development includingimprovements of speed andSTP

ã to support ongoingrationalisation process

ã to integrate web platforms forcustomers and employees

ã Quality focus throughintegration of e-Finance andcustomer service centre

Den Danske Bank

Wap Banking- demo of the next step

The first mobil Stock trading solution iDenmark

Launch next month

Den Danske Bank

WAP phase 2 - securities trading

Den Danske Bank

WAP phase 2 - securities trading

Den Danske Bank

Private customers

Ø Improved payment functions when privatecustomers buy online

Ø On-line STP consumer loans. Medium termshould yield substantial cost savings

Ø Full scale budget function - high loyalty valueØ Integration of Swedish retail operationØ Stand alone introduction of personalisation

tools in Fokus Bank

Den Danske Bank

Investment services

Ø Retail directed researchØ Selected newsØ Portfolio analysis / benchmark etc.Ø STP of trades in non-nordic sharesØ Fokus Bank will introduce trading on Oslo

Stock exchangeØ Expansion of Danske Markets corporate

product to Norway and Sweden

Den Danske Bank

Business to business

• Payment functions for corporate customers onlineactivities on own website or through exchanges

• Working on two specific business to businessexchanges

• Expanded version of corporate cash managementproduct

• Studying how we can support customers effort toincrease share of STP transactions

Den Danske Bank

Customer contact

Intelligent routing of e-mail. Project will improve servicequality and support integration between online andtraditional channels

(suppleres)

Den Danske Bank

Datamining / CRM

Ø Project to build long-term structure for datamining andCRM in the group

Ø Test project in Norway with market leading CRMsystems supplier

Ø Selection of news and research presented to the customeron the basis of portfolio and interests

Den Danske Bank

Alliances

Ø Selection of partners for customer micrositeØ WAPØ Discussions with potential B-t-B exchange partnersØ Other strategic initiatives

Den Danske Bank

Cost savings

The target is that branches are staffed only by sales andadvisory staff. This staffing will - with some practicallimitations - be fully scalable depending of share ofcustomers wishing to use this channel

Back-office will be fully centralized and scalable dependingof reduction of manual transactions routines and increasedlevel of STP transactions initiated by customers

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