Commerzbank AG — Investor Presentation 2022

May 24, 2022

KBW Digital Disruption Event Technology drives banking: Towards a clientcentric and efficient digital advisory bank

Jörg Oliveri del Castillo-Schulz, Frankfurt, 24 May 2022

24.05.2022 Commerzbank AG, Jörg Oliveri del Castillo-Schulz COO

Curriculum Vitae

Dr. Jörg Oliveri del Castillo-Schulz

Chief Operating Officer

Professional Experiences (recent)

2010 – 2013	Deutsche Bank AG, London Global Chief Operating Officer, Global Technology & Operations
2014 – 2015	Roland Berger Strategy Consultants, Frankfurt/Main Senior Partner, Financial Services Competence Center and Global Head of Business Transformation
2016 – 2020	IKB Deutsche Industriebank AG, Düsseldorf Member of the Board of Managing Directors; Chief Operating Officer and Chief HR Officer
Since 10/2021	Member of the Board of Managing Directors / COO Commerzbank AG, Frankfurt/Main
Academic Background
1989 – 1990	Master of Business Administration (MBA)

COO contributes to goals of Strategy 2024 by targeting four key levers

Technology drives banking: COO is key enabler for Commerzbank's transformation to THE digital advisory bank

Customer Centricity

Improvement in mobile key to strategic transformation – reducing cost-to-serve and driving revenue

2021: Key figures and feedback mobile app

• Commerzbank App is essential in serving our customers in a cost-efficient manner
• Importance as customer channel (along with Online Banking) has increased due to reduction of branches
• Continuously upgraded with customer-centric features – highly positive feedback:

Outlook 2022

Service: rollout of additional in-app self-service features incentivises customers to use digital channels and allows to shrink operational cost

Distribution: expansion to full distribution channel continues, digital products generate revenues with lower input cost

Customer loyalty

Experience: advanced digital features further improve customer loyalty and share of wallet

Q1/22 launches include: (online)

Money mate

Installment loans via app

Account opening via app

Outstanding customer experience in our mobile app enhances customer loyalty and reduces cost-to-serve Outstanding customer experience in our mobile app enhances customer loyalty – 70% of all retail banking customers already use digital channels

Remote advisory centers: Providing high-quality services for private customers through cost-efficient distribution Customer Centricity

Roadmap remote advisory centers

Remote advisory pilot

• 3 established centers
• Start fast lane for premium clients

Remote advisory centers

• 12 locations across Germany
• Transition of further customers and staff between 09/22 and 11/22

Finalisation of vision

● Full service offering of a direct bank with personal advice via phone and video for all private customers

COO drives transition via process streamlining and provisioning of IT infrastructure for remote advisory centers

Customer Centricity

Germany's first true direct bank for corporates leads to significant decrease in cost-to-serve

COO drives transition via process streamlining and provisioning of IT infrastructure for direct bank for corporates

Delivery Organisation enables us to simultaneously become more customer-centric and cost-efficient Efficient Organization

Organisational change Advantages

Our nearshore IT locations as significant cost saving levers and modern employers in their region Efficient Organization

Our nearshore locations are progressing well through continuous adaption of initiated measures

Digital Markets is major use case for simplification and modernization of IT architecture Modern Technology

Simplification

• Primary Target is to simplify our IT application landscape for the Capital Markets and Treasury Business
• As a matter of focus, interim target is to consolidate eight position keeping systems to a "2+1 stack" model (Murex & Summit + Apex)
• As a further goal, modernization of our IT architecture based on Commerzbank's digital strategy (e.g. leverage cloud based services) and reduction of fragmented system landscape

Use Case Digital Markets Target Picture

• Moving towards a modular and cost-efficient platform for a key business, demanding automated pricing capabilities across asset classes
• Reduction of IT applications by 40% until 2024
• Direct cost decrease of EUR ~50 mio. p. a. by 2024 across all involved functions as a result of simplified and digitalised processes

Our Successes in Digital Markets

• Since 2020, 56 IT-applications were deleted
• Further FTE-Savings will come on top
• 10 further applications currently in the process of deletion
• We offer our clients new direct solutions such as Automated Pricing and FX Live Trader Web

Simplification is an excellent instrument to reduce run cost by targeting legacy and license cost

In order to increase our speed in developing new software, we are investing in our technology base Modern Technology

Faster software development (illustrative)

CI/CD¹ stands for continuous integration and continuous delivery / deployment. CI is a modern software development practice in which incremental code changes are made frequently and reliably. CD means that changes to software can be deployed quickly

Benefits

CI/CD Development process …

… meets compliance standards automatically (compliance as code)

… responds to customer needs in a timely manner

… is significantly more timeand cost-efficient

Interplay of tech enablers such as CI/CD, Cloud, API² and RPA³ is essential for a future-oriented technology base4

24.05.2022 Commerzbank AG, Jörg Oliveri del Castillo-Schulz COO 10 1 Continuous Integration / Continuous Deployment | 2 Application Programming Interface | 3 Robotic Process Automation | 4 As well as modularisation of it landscape, efficient test data management & development environments per click

Robotic Process Automation with high efficiency impact on our processes Modern Technology

Cloud increases flexibility, contributes to overall bank efficiency, and is key enabler for digitization Modern Technology

Cloud is the future way to do IT

We have already achieved following cloud-based use cases

Enhancing innovation funnel with external partners enables delivery of cutting-edge products and services Innovation

Innovation funnel			Description	Social trading combines social networking with the Use Case "hi!stocks" trading of securities and is intended to inspire more people for trading
		Scouting new partners / technologies	● Constant monitoring of fintech market ● Partnering with suitable fintechs via neosfer & CommerzVentures or other partnership models	Q1/21 Research for social trading fintechs and comparison of providers StockRepublic identified as suitable partner
		Integrating them into our organization	● Fostering know-how exchange between partners and our organization	Q2/21 comdirect initiates white label social trading partnership with StockRepublic Neosfer invested into StockRepublic
		Developing new ideas / business models	● Jointly developing new ideas and business models ● Providing teams with CBK resources to push them to the next level	Q3-4/21 comdirect initiates pilot for hi!stocks Internal testing with CBK volunteers; Continuous development
		Launching new business models / partnerships	● Launching new business model within Commerzbank product portfolio	Q2/22 Go live hi!stocks Quickly gaining traction, substantial user growth

Innovations: Internal External Launched

Combining external and internal innovation is key to making our customers happy by providing them with new products, features and services

Customer feedback

In addition, we act as an active player in Open Banking business models… Innovation

Open Banking business models – active and ongoing approaches/initiatives of Commerzbank

API as prerequisite for Open Banking – Open architecture or flexible infrastructure for business model implementation required

…and also develop Distributed Ledger Technology use cases in 4 areas Innovation

Commerzbank's current DLT initiatives (selection)

DIGITAL ASSETS

Evaluate opportunities for products and services for our clients in the field of digital assets – one of the first German banks to apply for crypto-custody license

DIGITAL IDENTITY

Lissi: DLT based self-sovereign ID Mgmt. platform & network in Germany (ID union), internal use cases

DIGITAL MONEY

Themis: ERP-integrated platform for automized order-toinvoice management incl. cash settlement on DLT with BASF and Evonik

Marco Polo: Trade network providing transparency in trade processes and access to risk mitigation and financing offers (in production since 2021)

Summary

We as Commerzbank…

… want to become the digital advisory bank for Germany and make banking easier, faster, more intuitive for our customer

Efficient Organization … make technology the driver of our business

Modern Technology

Innovation

… make the bank more efficient and more cost-effective

… innovate sustainably