IBM and Pegasystems Form Strategic Alliance to Deliver Global Banking Solutions

Global Alliance to Provide Payments and Compliance Management Solutions to the World's Largest Financial Services Institutions

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SOMERS, NY & CAMBRIDGE, MA - 29 Jul 2004: IBM and Pegasystems Inc. have formed a global strategic alliance to deliver payments exceptions and compliance management solutions to the world's top-tier banks and card issuers and acquirers, the companies announced today, in order to solve some of the most demanding challenges facing global financial institutions.

Through solution development that will pair IBM's infrastructure with Pegasystems' "smart" BPM applications for exceptions and dispute management, wholesale and retail banking customers can benefit from dramatically reduced costs; decreased payment risks and loss; and rapid issue resolution for greatly improved service and increased customer loyalty.

"The world's largest financial institutions turn to IBM for systems and services," said June Felix, general manager of e-payments, risk and compliance at IBM. "Deploying Pegasystems' financial services applications as the exceptions 'hub' on our scaleable infrastructure can allow customers to realize breakthrough value in reduced costs and risk, while delivering greatly improved customer service. Pega's extensive domain expertise and their unique approach -- where business rules and process can change on demand -- can help us execute IBM's on-demand strategy even more effectively."

Under the terms of the agreement, the two companies will market Pegasystems' entire Quality & Exception Manager suite of financial services applications, optimized for IBM eServer* systems and IBM TotalStorage* Solutions, DB2* Universal Database software and the WebSphere* Internet infrastructure platform, including WebSphere Application Server and WebSphere MQ.

"This alliance creates synergies that will both deepen our vertical expertise and significantly expand our footprint across the financial services industry," said Henry Ancona, Pegasystems' president and COO. "Customers will benefit from state-of-the-art payments solutions on leading-edge platforms, for accelerated improvements in cost reductions, risk control and customer service. Pegasystems will gain the leverage of IBM's 2000-plus sales staff, as well as the world's leading IT services organization. And IBM can profit by driving significant incremental business in both their installed base and green-field opportunities."

Today's announcement marks a further step in the growing relationship between the two companies. In March of this year Pegasystems joined IBM's Business Performance Management program and its ISV Advantage Initiative, and also reached an accord with IBM Business Consulting Services (BCS) for global services delivery. This new strategic alliance is another example of IBM's commitment to go to market with independent software vendors (ISVs) to deliver leading-edge solutions.

Pegasystems provides a genuinely differentiated approach for solving complex exceptions, payments and risk-management challenges, combining out-of-the-box rule sets, pre-packaged workflows and front-to-back-office integration abilities to give organizations exceptional automation and productivity gains, and business users the agility to change and specialize their processes quickly and easily. The company's smart BPM applications leverage 20 years of experience with some of the world's largest financial institutions and healthcare organizations, including Bank of America, Bank of New York, Citigroup and JPMorgan Chase; eight of the top 15 U.S. card issuers; all 12 U.S. Federal Reserve Banks; and 20 percent of the nation's Blue Cross Blue Shield licensees.

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