Alfa Financial Software Holdings PLC (ALFA) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Andrew Page, and I am the Founder and Executive Chairman of Alfa. It's my great pleasure to welcome you to this Investor Day. This is the most exciting time for the company that I can remember. During the next 2 hours, we want to take the opportunity to tell you about the Alfa Systems product and the technology that underpins it. These are driving our success and are key to our future. I really hope that you enjoy the presentations. And on that note, I'll hand over to Andy Denton.

Thanks, Andrew. Good afternoon, everybody. I'm Andrew Denton, and I'm Alfa's Chief Executive Officer. I'd like to add my welcome to Andrew's. Today, I'm joined by Matthew White, our Chief Operating Officer; Andrew Flegg, our Chief Technology Officer; and Rich Dewire, our Chief Revenue Officer. And it's my great pleasure to kick off this Investor Day, and in the next few minutes, I'm going to explain why Alfa Systems is so fundamental to Alfa, the part it plays in our company's performance, and why it's so strong in the markets that we serve. I will also introduce 4 themes to keep in mind as you listen to Matthew, Andrew, and Rich, as well as our presenters on video over the next 2 hours or so. Before we start in earnest, I'd like to let you all know that you can submit questions in advance of our Q&A session anytime you like. And we'll be able to extend the time if we have lots of questions. Also, please take note of the obligatory disclaimer slide. Alfa has many important attributes that create barriers to entry and competitive advantage. We have amazing people, an amazing culture, amazing domain knowledge, and amazing delivery capability. But if our people are the soul of our business, Alfa Systems is the beating heart. Both our today and our tomorrow are powered by our product and our technology. Our leadership within our market starts with the strength of Alfa Systems, which has evolved over 30 years, and that leadership is growing as we further evolve and grow our Alfa Systems. Many of you will have seen the presentation material from our successful half-year results, and you'll be familiar with this highlight slide. I'm not going to walk through it today, but looking at those results through the lens of our product and our technology, the cells we made and will make, the new installs we delivered, the upgrades we delivered, the growth in subscription revenue all have their foundation in the Alfa Systems product, the way we evolve it and innovate over it and the approach we take to develop it. The Alfa Systems platform is a hugely valuable part of our business. As Matthew will explain, Alfa serves the global lending markets and the drivers for change within our target markets such as regulatory change and the competitive landscape created demand for systems replacement. But new drivers have emerged and continue to emerge that plays a greater demand on technology, the need for digital omnichannel interactions with customers and other parties, the increased emphasis on customer journey, the rapid rise of Banking-as-a-Service, and the newly emerged need to be able to pivot an organization in the face of rapid and profound change, such as COVID, need technology to be reliable, scalable, flexible, agile and modern. And these things will be brought out in much more detail by Rich. Alfa systems is all of these things. In the videos and presentations that follow, we will dive into all aspects of Alfa Systems, how it's built, what it does, how it's used and where it's going. And as you listen, I would like you to keep in mind 4 key themes: true product, platform, evolution and innovation, and deliverability. You will hear from Andrew Flegg about the way we manage and develop the Alfa product and the extra mile we go to ensure quality, consistency and compatibility with each new release. One of the reasons we work so hard in this area is because Alfa Systems is a true product. The largest and smallest customer all over the world in auto and equipment and everywhere in between are all powered by the same software. Alfa Systems is designed to be upgraded regularly, delivering more business benefit and more opportunity to our customers and underpinning the growth of our company. Everything is in the box. In the requirement for agility and flexibility from our target markets that I mentioned earlier, it cannot be satisfied by product alone. So Alfa is designed to operate as a platform. You will hear about Alfa's service-oriented architecture and our API strategy and how Alfa functionality can be consumed in all manner of ways. Platform is key to omnichannel deployment, key to seamless integration into large corporate ecosystems, and it is the engine for Banking-as-a-Service strategies, but moreover, this ability to integrate and interoperate satisfies those needs that our customers and prospects don't yet know about. Our true product strategy and platform technology means that investment in the growth and evolution of the technology and capabilities of Alfa Systems is even more valuable to our company. There is a top-down-driven strategy which governs our investment and guides our engineering priorities. This road map is driven by the market, our customers, our own vision and the housekeeping requirements of a large enterprise system. And this relentless forward motion ensures that we will never have to pause and reengineer our software, so that we can keep moving forward as an organization. Bottom-up innovation of our product and our technology is also critical to add creativity to that forward motion and also to nourish our culture. Free thinking innovation days and hackathons sweeping up all of our talent all around the world move us forward in ways that only democratized teamwork can deliver. And with 15 customer deliveries reported at the half-year presentations last month, 2021 is on course to beat the record 17 that we achieved in 2020. But there's no shortage of stories of nondelivery in our sector and in the software sector as a whole. So what makes Alfa so special? The talent of our client-facing colleagues and partners in the delivery part of our business and 30 years of continuous delivery success are an enormous part of that story, of course. But it's important to keep in mind that Alfa is designed to be delivered. Building a leading-edge software platform is only part of the story. Engineering it for real-world success doesn't happen unless you make it happen, and Alfa Systems' deliverability is a critical differentiator. All of these things we'll come across in the videos from our customers, but all of them will touch upon deliverability because this real-world systems performance is something that everyone in their organization sees because what we deliver underpins progression, efficiency and agility for their business in a world that is not always predictable. And so with that in mind, before I hand over to Matthew White, it is now my great pleasure to introduce a video of Neil Davies, CEO, Commercial at Close Brothers, and a customer for more than 2 decades. Neil will explain why they recently chose to recommit to our partnership by upgrading from version 4 to version 5 of Alfa Systems.

Close Brothers has had a relationship with Alfa CHP as well since 2003 with our Alfa 4 System going live in 2006. Close Brothers chose Alfa after a robust tender process. That we were already on Alfa 4 was useful in renewing the company. But our new system had to interface with Salesforce, Cloud Lending Middle Office and Snowflake. We needed a system that was fit for purpose and fit for the future, and Alfa 5 met that criteria. Alfa 5 will give Close Brothers scalability, but also nimbleness that's a prerequisite in a changing environment. Close Brothers operate in a number of jurisdictions and changes are constant, whether that's regulatory, accounting, M&A, climate change, or just internal reporting. We're going to be in a much stronger position to deal with the changes quickly and more economically.

So as Neil said, we've been working with Close since 2003. Close as an organization knows us and how we work really well. The relationship is a very important one for Alfa, and we're thrilled that Close has committed to Alfa and to Alfa Systems for the long term. I'm Matthew White, Alfa's COO, and my role today is to outline the fundamentals of Alfa Systems and the market that we serve. I'll start with an overview of asset finance and the requirements that our customers have for their software and systems. I'll then move on to introduce the Alfa Systems product and the technology that underpins it. And the key takeaways are that asset finance is a vast market with a significant demand for software. So the opportunity for Alfa is massive. The global asset finance market is extremely complex, so the barriers to entry for competitor software are substantial. And that Alfa Systems is uniquely positioned to take advantage of that market opportunity because it provides immense functional breadth, because it's built on a leading-edge future-proof technology platform, and because it's proven for production deployment at scale. Asset Finance is a huge part of the finance industry that tends to fly somewhat under the radar. Substantial new business growth is a long-term trend and asset finance is also hugely resilient. For example, mid-2020 saw new business drop dramatically, but rebound very quickly such that it's now back up to pre-pandemic levels. Asset finance is also resilient to financial downturns with lenders clinging on the security provided by assets as collateral, and borrowers influenced by our desire to reduce capital outflows. As an industry, Asset Finance covers all asset types, except for property, which tends to be separated for historical and technical reasons. And according to the Finance and Leasing Association, the FLA, in 2020, 34% of U.K. investment in machinery, equipment and software was funded by FLA members, and this is a typical figure for developed economies as a whole. So upwards of 1/3 of all asset purchases use asset finance of some form. The industry can be segmented in various dimensions. Firstly, we can consider auto finance versus equipment finance. Around half of asset finance relates to cars or commercial vehicles with the other half relating to equipment of various types. Asset Finance is used to fund the majority of vehicle purchases. Systems complexity includes vehicle configuration, manufacturer support and dealer commission, as well as add-on products such as maintenance and insurance. Good examples of equipment commonly financed are manufacturing machinery or aircraft. Each equipment type has its own peculiarities. For example, aircrafts have specific maintenance schedules and usage data such as flight hours must be recorded. A second dimension for asset finance segmentation relates to the providers of finance, which tend to be either banks or manufacturers. Banking providers view asset finance as an inherently secure form of lending and operating in a highly regulated environment places demands on software providers. Manufacturers often enter the asset finance market as a means to control and promote the sale of their own brands. For obvious reasons, manufacturers often have a much stronger focus on the asset itself and are keen to control residual values and remarketing. Asset Finance also covers consumer and corporate and customers. Consumer finance, in particular, brings added complexity and risk for the finance provider. In the U.K., we have Consumer Credit Act or CCA regulation. And each regulatory system has its own equivalent. And dealing with consumers also brings demanding information security regulation such as GDPR. As Andy said, the regulatory burden is only increasing, and finance companies must be able to rely on their systems for compliance. Asset value provides further variety. Big ticket leases for assets such as satellites, oil tankers or shopping centers require specific and very precise accounting. And at the other end of the market, high volume provides an additional layer of complexity. Our highest volume customer relies on Alfa Systems for processing nearly 5 million end customers' cars. So this is high-volume processing in a relatively high value environment, certainly for the car owner. Systems must be fast, accurate and low touch. And finally, there's also an international dimension, which brings another level of complexity. Alfa is a global software provider with major operational centers in London, Detroit, Dallas, Sydney, and Auckland. An increasing number of customers and potential customers want to make multinational systems a reality. And achieving this requires what we call multi, multi, multi. We support multicurrency, multi-language and multi-regulator requirements in a single instance of software and with a single database. We now have one customer operating portfolios in 13 countries. We're aware of competitors who claim to be able to support the associated complexity, but we're not aware that anyone else can prove it. I've already mentioned some of the systems requirements for asset finance, but as I've said, the demand for software is significant. So I've only scratched the surface. This complexity is part of the reason for the size of the market for asset finance software. Another is the size of the asset finance market itself. Asset finance is huge, with global outstandings of $5.4 trillion, and that's reflected in the associated software market with $3 billion of annual spend. And both of those figures are from 2015, and these markets are growing. Systems requirements cover front office or point of sale, middle office or originations, and back office, which includes contract management and asset management. The term front office is used to refer to the asset finance point of sale. For auto manufacturers, this often means salespeople in car dealerships. But in an increasingly digital world, it's also vital that software can enable consumers to produce their own vehicle quotes. For our banking customers, the point of sale might be a bank branch or a sales agent on the road. Often, our banking customers also provide a white labeled finance offering for equipment vendors, and that means that the software might need to appear to represent the finance arm of the manufacturer, while actually talking to bank systems. And our customers often source new business through broker sales teams. Many brokers will work with multiple finance companies, so the software must be able to take an automated feed from the broker systems. This also means that speed of response is key, which is where our customers rely on middle office functionality. The middle office represents everything that happens between the creation of a quote and having a live finance schedule for a delivered asset. Key middle office functionality includes credit decisioning, which involves checking an end customers' creditworthiness, often using credit reference agencies and scorecards. This is an example of an area where AI through Alfa iQ has an opportunity to transform the market. Strong workflow support and business process automation is clearly vital in minimizing middle office processing time and errors. But the most functional area with the most complex requirements and the highest complexity is the back office. This aspect of the software also generates the most revenue for software providers and involves the greatest switching cost for our customers. So it's here that software is the most sticky. And it's in the back office that Alfa Systems advantage is most pronounced. PwC's market report in 2016 found Alfa's support for in-life processing to be ahead of anything else in the market, and we have invested significantly since 2016 to extend that advantage. Back-office processing includes all in-life contract management transactions, such as billing and collection, and most of all customer services transactions such as address changes and payment reschedules. It's in the back office that complex accounting takes place. Lease accounting is a specific and demanding area under accounting standards and Alfa's flexibility enables us to handle the most challenging of customer requirements. End-of-life processes such as asset collection and remarketing are further requirements for the back office, maximizing the proceeds from sale of assets on completion of the lease term can make a material difference to a finance company. And end customers are increasingly expecting fully formed digital solutions, so back-office systems must enable self-service for all in-life processes. Alfa is the leading enterprise system for the asset finance industry. When we say that Alfa is an enterprise system, we mean that it can act as the core system of record for asset finance providers. It's the heart and lungs of technology within the organization, and that it can cover the full life cycle for asset finance products. Alfa Systems can be considered similar to ERP, but within asset finance as a specific vertical. And in fact, historically, we've seen ERP providers consider entry into the asset finance market. But each has found that the associated complexity makes market entry prohibitively difficult and expensive even for pockets as deep as the likes of SAP and Oracle. Alfa Systems functionality covers all of the complex requirements that I have described today and plenty more. And Alfa Systems' foundations include a common workflow engine, a common accounting engine, a common online data source for business intelligence and a single database for each implementation. Alfa's workflow and automated decisioning capability are differentiators because they enable complex configuration of complex processes such that users need only be involved where absolutely necessary and so that users are presented with single-purpose screens for performing the interactions that are required. You'll have heard a lot about robotic process automation or RPA. Alfa implementations don't require RPA systems bolted on top of them because RPA comes as standard. To provide further insight into Alfa Systems' functional leadership, Tom Minall, our Global Sales Director, will provide a demonstration of Alfa Systems' functionality by a video later in this session. Before introducing the technology behind Alfa Systems, a word on the software's history. The functional breadth of Alfa Systems is possible because the software has been developing for 30 years, growing steadily over that period. Alfa Systems led the asset finance market for functionality in 2010, but we felt that a leap in the technical platform was required to ensure technology leadership for the next generation. We achieved this replatforming while maintaining all of the existing functionality by converting from our legacy platform rather than rewriting from scratch. A rewrite would have been prohibitively expensive and result in reduced functionality. But conversion was extremely complex, involving multiple prototypes and proofs of concept. A successful end result was only possible because of the huge talent pool built up by Alfa over many years. And that talent pool included Andrew Flegg, who is now our CTO and part of the team presenting today. We decided to maintain the same database structure pre and post conversion, so that we were able programmatically to run complex transactions simultaneously on old and new versions of the software and prove that the conversion was successful and hadn't introduced bugs. Competitors who've tried replatforming have given up or discarded the output or both. Our software is built on and within leading-edge technology. Alfa runs as a single instance on a modern technology stack. To understand the importance of Alfa as a single platform using consistent technology, it's helpful to compare this to competitors. As I said, even to come close to Alfa's functional richness requires software that's seen many years of investment. As a consequence, many of our competitors run legacy software on legacy technology stack at the back end. But legacy technology doesn't stand a chance of selling in the front office. So competitors end up with a mix and match approach using multiple technologies and often multiple databases. This causes many issues. For example, technical deployment becomes much more complex because, in effect, multiple solutions need to be deployed. Reporting becomes much more complex because reports have to run over multiple systems. And of course, integration with customers' existing systems is also much more difficult than it should be because of the number of integrations required. Alfa's single platform on a single database avoids all of this complexity. And Rich Dewire, our Chief Revenue Officer, will further compare Alfa Systems to competitor products later today. As well as simplicity through a single technology stack, Alfa Systems runs on modern technology platform, which brings many advantages. Alfa is written in Java, which is one of the most popular software development languages in the world. There is no better option than Java for writing an enterprise finance system because of the functionality of the language, because of the associated ecosystem, which is huge, because of the availability of skilled full stack developers, and because of the constant evolution of the core technology so that it remains at the leading edge. For our user interface development, we use React, which is an open-source JavaScript library maintained by Facebook and an open-source community. This means that we have an extremely functional user interface with a modern feel. Our single-tenant SaaS solution is based on AWS Hosting with a mainly open-source technical platform, including PostgreS, one of the most advanced databases in the world. But while we're seeing cloud reticence reduce, we do still have customers and prospects within large finance organizations, which are not ready for our hosted solution. In order to ensure that we can support customers' requirements for private cloud implementations, we maintain a level of flexibility in the technical stacks that we support. Our modern technology stack means that we can run on contemporary commodity hardware, which is far cheaper for our customers than legacy proprietary hardware. Put simply, running systems on mainframes is very expensive. Alfa customers don't need to do that. And we use docker containerization for consistency across all of our deployments. Sitting somewhere between a functional and a technical requirement is the need for integration. Customers require systems that are easy to integrate within their existing systems landscape. Our customers are often large organizations with many upstream systems such as bank CRMs and multiple channels to market, and many downstream systems such as group general ledgers and data warehouses. Integration with digital solutions is also key. We have a genuinely open application programming interface or API, which enables this integration. An open API is something that's easily claimed, but customers' sales processes are generally sufficiently sophisticated to sort the spin from the reality. And in addition, we provide tools for aiding integration, including support for end-to-end processes, not just for sending and receiving data. Today's focus is squarely on technology, but it's worth just a few words about the customer delivery that's enabled by Alfa Systems' functionality and technology. We are a software and delivery company, and we never forget that all our efforts come together when we see successful delivery of our software for a customer. We succeed with complex projects where our competitors struggle. As Andy said, that's because of our people and because of our product. And our delivery track record across our industry with some of the biggest players in asset finance gives confidence to potential customers in system selection processes. The Alfa Systems software is constantly moving forward. Every year at least 100 years of experience goes into developing and maintaining the software. Investment in our software ensures that Alfa Systems remains at the leading edge of technology, and this means that we won't need to pause our growth in order to renew our technology at some point in the future, and functional improvement to Alfa Systems continues through both client-led and internal investment in our product. We always own the intellectual property for improvements to our software, so that we can sell to new and existing customers. And all of this means that we continue to extend our functional lead. We have a clear product roadmap, and Andrew Flegg will provide a further taster for the future of Alfa Systems platform later in today's session. We also continue to simplify our deployment. We've spoken before about our strategy for simplification. Our market is huge and we're the market leader. Our growth comes from new software fees and new subscription. So our strategy is to simplify deployment of Alfa Systems, enabling us faster to increase our capacity for delivering new Alfa implementations. And the key part of our strategy for simplification is Alfa Start, our product for smaller asset finance providers. Sarah Taylor, one of our senior managers, describes Alfa Start in more detail in the next video. And Sarah will be followed by Dan Bailey, Executive Director at Arkle, who recently went live with an Alfa Start implementation.

Alfa Start offers a preconfigured hosted software solution for the quick and cost-effective delivery of Alfa Systems. Using a predefined best practice configuration and process catalog, Alfa Start allows operations of all sizes to take advantage of the multi-featured market-leading Alfa Systems platform. Alfa Start can be delivered quickly and efficiently. The Alfa Start approach is designed to accelerate system change program, so our customers can maximize value and minimize risk. So overall, what does Alfa Start give us and what does it give our customers. Alfa has increased the number of available customers in our target markets through Alfa Start. By enabling cost effective implementations through an out of the box approach, we can now work with the smaller customers within our markets, opening up the Tier 2 market layer. Not only does it help us sell into those, say, smaller customers than traditionally that we've sold to, it further enhances our strong market proposition for those Tier 1 larger customers that Alfa has traditionally been known for working with. This is really key. It helps protect Alfa's position as the leading provider for asset finance software within these markets from new startup competitors coming into these markets who will typically work with the smaller customers first. Further to this, while we are enabling quicker implementations, Alfa Start helps ensure the maximum efficiency when it comes to the use of every single Alfa implementation day. Now that's important because it adds benefit to our customers. Our customers go live faster, so they get to reap the benefits of Alfa Systems earlier. For Alfa, we can deliver more projects, still providing the high-quality service that we're known for, but using fewer implementation days per project. This enables us to deliver more projects simultaneously, but with the same number of people. One of the outputs of this is, it's increasing our number of customers across our target market, spreading out our revenue across a broader range of customers within those markets. Alfa Start leverages Alfa Hosting. It's really helping to build our customer base using our excellent Alfa Hosting service. It helps build out Alfa subscription revenue as a result. So overall, Alfa Start brings benefits to both our customers and to Alfa. Start makes our world-leading product, Alfa Systems, available to more companies. Our customers can use Start to simplify and expedite complex change programs, reducing risk, and enabling them to see benefits earlier. And overall, Alfa Start allows us to deliver more projects to those customers in fewer days, but crucially without impacting any of the quality for which we're known.

Hi, I'm Dan Bailey from Arkle Finance. So what impressed me most about the Alfa implementation was the pace and the tempo they applied to the project, and the agility they applied at a time when we were going through the challenges of COVID in the autumn of 2020 right through to the spring of 2021. So Alfa Start was a very close functional fit for the needs of Arkle. From memory, there was only one area which required any genuine development change. The project very much focused on configuration improvements and followed the best practice that Alfa had learned from their activities and their experience in the asset finance market. Would I recommend Alfa Start to another company? Yes, I certainly would. And in fact, I already have.

Those videos from Sarah and Dan demonstrate that our delivery focus is at the heart of what we do, and that delivery is accelerated by products like Alfa Start, our Hosting service, and great people, and underpinning it all, our modern evolvable software platform. That platform is what I'd like to talk to you about now. I'm Andrew Flegg, Chief Technology Officer at Alfa. I started my career at big multinational companies, but joined Alfa about 16 years ago. The opportunity to work with our customers as part of the end-to-end delivery of software change sold Alfa to me. Since then, I've worked on implementation projects, product development, the replatforming of Alfa Systems that Matt mentioned earlier, and end-to-end solution architecture. Now as CTO, I'm responsible for all of our technology, from the laptops we develop on, to our software platform, and how we deploy and integrate it on our projects. Matt was talking about the different customers we have and the dimensions they represent. This brings functional complexity. Our customers range from simple contract, highly automated vehicle finance companies to complex contract equipment financiers. Our projects run from greenfield implementations of a new line of business to migrating mature portfolios from legacy systems. From customers who want a turnkey solution that does almost everything, to large enterprises that have complex integration requirements. And assets that range from submarines to sports cars to satellites and everything in between. Alfa Systems is the platform that can support those customers, both for the short-term implementation projects, but more importantly, the long-term growth of their business. One of our principles is to give our customers functional and technical ownership of the solution, the flexibility, capability, and responsibility to use our standard software platform in new ways without needing software changes from us to introduce new products and services to their end customers. That principle is reflected in our documented company purpose, to deliver our leading-edge technology with smart, diverse people, making our customers future ready. But we can't make our customers future ready without maintaining our leading-edge technology or without a clear vision of what that technology needs to do in the future. As it says, we employ smart, diverse people who both participate in and lead the wider industry. And we also work closely with our customers, allowing us to know what they want today and what they're likely to want tomorrow. We can make sure our platform can move in those directions. We develop Alfa Systems as a single platform that can handle these different drivers to make sure that we deliver both today's needs and tomorrow's requirements as efficiently as possible. We have a single global platform which allows us to leverage the features developed for one market or vertical in another, a modular platform, so we retain the flexibility to recompose the application for other use cases in future, a platform that enables digital innovation through an open API, a set of application programming interfaces that allows other services to leverage Alfa Systems' rich functionality as part of an integrated landscape without users having to swivel their chairs between different applications. We enable always-on operation to give the end user the best customer experience they could want, and finally, provide all that through a managed single-tenant Software-as-a-Service solution. Our managed SaaS environments allow our customers to focus on their business rather than IT operations, reducing their overall total cost of ownership, while increasing our subscription revenue. Later, I'll talk more about how we built the platform today. But when we announced Alfa Systems Version 5 back in 2009, we designed it to not only be on the leading edge of enterprise software, but an evolvable technology platform that we could and can and do continue to iterate, building on the rich functional base we'd established over the previous 20 years. Since then, we've released a new version of Alfa Systems every 4 weeks without fail. We have customers who take each release and put it in train to go to production, and most releases go to more than one customer. Our customers, therefore, rely on both quality that the system will work properly in the new version and backwards compatibility. By default, all existing processes and integrations will continue to work in the same way after an update. This means that business process changes to utilize new features can be rolled out independently of deploying the new version. By enabling and encouraging upgrades, we reduce the number of versions that we have to maintain, reducing costs. Quality and backwards compatibility are paramount, but so is moving forward. Our customers want to move into new markets and launch new finance products. The only solution to these drivers is to embrace an evolutionary approach. If something is hard, do it more often, so it becomes easier and more efficient. And that makes each step less risky individually, And there are many examples of this in the last decade, from our supportive database platforms to the cross-application uplift of our user interface. As Matt said, our evolution enlarges the barrier to entry for competitors as they've got a lot to catch up on, and we're still moving forward. Future ready means we have a clear vision of that future, but we need to be able to react to other industry and technological innovations that are coming, and so that drives our core feature, adaptability. This constant evolution was demonstrated last year when we launched the seventh major version of V5. This included an exciting overhaul of the entire UI and user experience, designed in close collaboration with our end users, which helps existing customers get more efficient and increases our attractiveness during the sales process. The launch of Alfa Start as a pre-configured offering to get projects up and running quickly, so we can get more clients live with a given team size as we heard earlier from Sarah and Dan, and we'll hear later from Hampshire Trust Bank. It also included functionality to support the transition away from LIBOR and other similar rates, which are being phased out towards the new risk-free rates taking their place, a key regulatory requirement in many markets, and support for new finance products through usage-based billing and cash accounts, giving customers more flexibility in the way they do business, which is particularly important now as we see an acceleration of alternate business models, particularly as the vehicle fleet shift to EVs to address the climate crisis and other mobility services are launched, something we'll hear from Deloitte later. We're now well into developing and shipping to customers the features that will make up the next major version. Although 5.6 was the seventh major version, we've released over 150 new versions of Alfa Systems V5. Its launch in 2010 gave us a strong technical foundation for the decades to come, building on the strong functional expertise we've gained since 1990 through implementing our software. This gives a huge barrier to entry for new competitors. Our platform is the most comprehensive, most flexible out there and that head start will be difficult for anyone to overcome as our evolvable architecture means we're still moving forward as they're trying to catch up. That evolvability is based on a modular service-oriented architecture. Modularity is important for a couple of reasons. Firstly, it makes the code base easier to manage with clear responsibilities for each area of code, which in turn makes it easier to work out how to make a particular change. Secondly, ensures our longer-term flexibility as a company by enabling us to use the same block of code for another use in the future. In other words, not only are we building the platform we need today, but we have a modular structure for possible tomorrows, allowing us to address adjacent markets with common building blocks, meaning we don't have to reinvent the wheel if and when we look to those new markets. Having a strong architecture is great, but we need to get the functionality built on that architecture to users, not only through our user interface, but through other systems too. We do this with our rich integration capabilities. We've got comprehensive real-time APIs available through standard technology our customers expect, as well as webhooks and support for event-based architectures. For integrating with legacy systems, we've also got bulk data interfaces. These strengths and our aim for our customers to be able to self-serve their own functional and technical process changes really demonstrated its value last year. Several customers used our API to defer their customers' payments in bulk because of income stresses caused by the pandemic. In one instance, a customer added a simple button to their website for a consumer to request a payment holiday. This invoked Alfa Systems, through our API, verify the consumers' eligibility through our business rules engine, applied an automatic restructuring of the contract, and notified the consumer of the result instantly without any human interaction to complete the process, and without us needing to make any changes to our software for them to make this. This level of flexibility and functionality couldn't be delivered efficiently without a strong focus on automated testing covering functionality, API compatibility, performance, integration, and user experience. We can move quickly, focusing on customer deliverability, because we don't need to do a lot of manual testing before we release. And because we don't need to do a lot of manual testing, we don't need a large team of testers, which reduces our costs. We use machines rather than people to do repetitive detailed verification tasks far more efficiently than could be done by hand. Matt introduced our technology earlier. We developed using Java, React, and TypeScript, with each technical module contributing its data structures to a single scalable database, giving the speed and immediate consistency required for financial application. Most installations now use PostgreS as a database, and we still support Oracle for clients who want it. Our approach to databases demonstrates the evolution of our software that I talked about earlier. PostgreS support is something we've added in the last few years, and we did so without having to rewrite large sways of our platform. We use Bitbucket and Jenkins as key parts of our infrastructure to store, validate and build our software, which we then package into containers for deployment in Docker, Kubernetes and the cloud. Containers are a widely used technology that fits with our ethos of repeatability, simplification and automation, as they reduce the amount of work needed to do low-level configuration as part of the installation of a software product. They do this in a similar way that shipping containers simplify the logistics industry through standardization sizes, which allows ships, docks, trucks, and cranes to manage anything without worrying about the contents. We benefit from that standardization in our SaaS solution. As you'll have seen from our recent results, our subscription model is increasingly important to us. Not only does it provide an underlying revenue stream. By taking on responsibility for the installation, operation and monitoring of the technical aspects of clients' environments, we accelerate our implementation projects, giving our customers improved time to value and simplifying their responsibilities, meaning they can focus on running their business rather than running IT. Hosting consolidates our wide breadth of knowledge and experience of the best practices of deploying enterprise software products into a single-tenant Software-as-a-Service solution. We build in security, flexibility and reliability through infrastructure as co-techniques, meaning we can deploy a new customer test environment with a single button click and know it will work in the same way as their production instance. Security is our priority. We are entrusted with the data of our end customers and we want to make sure their personal information is protected in the ways we'd want our own individual data protected. Through our automation, we can have the reliability and scalability benefits of multi-tenant SaaS, while giving our customers the security and data privacy protections from a single-tenant solution. Everyone gets the same, but separate infrastructure, managed by a central team and tooling in the legislative jurisdiction of their choice. Importantly, our fully managed service is a lot more than just infrastructure. Some of the key parts of our offering are shown here and include task scheduling, orchestration and monitoring, automation of security patching, configuration changes and deployments using our tooling, regular business continuity, disaster recovery and security penetration tests, 24/7 performance availability and security monitoring directly connected to Alfa's global support team, and audited processes and procedures with ISO 27001, 27018, and SOC 2 certifications. This is a comprehensive, well-rounded offering that gives an ever-growing number of our customers faster time to value. However, as Matt said, we recognize that some of our customers aren't yet comfortable with a managed service, so we need to be flexible and still offer the ability for our clients to deploy and manage the software themselves. But it's the exact same software. We're running the same code on our laptops for development as our private cloud clients run as we deploy an Alfa Hosting. And this means we simplify our development process and our customers get the most flexibility while we can also add additional services outside of the Alfa Systems code base like these. Our delivery track record on implementing our software is top notch, as Matt said, and Hosting only improves that by accelerating implementation projects and by codifying our expertise, so the operational risk to our customers for ruining their IT is removed, something that's critical in an Alfa Start delivery, as Sarah described. Hosting also gives us an operational differentiator from our competitors, which is why since 2017, we've had a cloud-first sales approach. We'll now hear from Alex Barnes and Alison Andrews, part of our Hosting team on the value they're delivering. Our Hosting team punches well above their weight, and that's because of the skills and experience the whole team brings, including Alex and Alison. Alex is one of our best technologists with experience on delivery projects, product development and product and solution architecture, and Alison actually used to work as a customer, in charge of operations at one of our most successful implementations before she moved on and we got the opportunity to have her join our team. She brings that experience to bear every day, reducing risk, increasing rigor, and focusing on real customer value. They work together greater than the sum of their experiences to deliver our gold standard service from a global operations team.

Hello, my name is Alison Andrews and I am responsible for the Operations side of the Hosting service.

And my name is Alex Barnes. I am the Global Director for Alfa Hosting. I am responsible for the overall delivery of our single-tenant managed SaaS solutions. So infrastructure is very rarely a competitive differentiator when working with core finance systems like Alfa. But by selecting Alfa Hosting, our fully-managed single-tenant SaaS solution, our customers are able to focus on delivering real value to their customers and their users from the very first day of an implementation project. It's no longer necessary to stand up dedicated teams to design, build, deploy and support the infrastructure required to start building and testing integrations and optimize business processes. Alfa Hosting provides everything as a single cost-effective service from the very first day. Throughout an implementation project, we help our customers to plan for optimal environment usage and by leveraging the flexibility of Alfa Hosting, we can rapidly scale the number of environments to support the needs of a project at every stage. This might mean new environments for imperative finance testing, that might mean larger environments for performance, for migration testing, or reducing the number of environments when they're no longer required. Once live, our clients benefit from our extensive experience supporting Alfa, combined with our fully automated monitoring and alerting platform, which is directly integrated with our global 24/7 support team. So Alfa Hosting is a fully managed service operated on the Amazon Cloud and built using end-to-end infrastructure as code approaches to deployment and management. But it's actually a lot more than just infrastructure. We offer a complete monitoring and alerting platform with direct integration to our 24/7 global support team, who provide a worldwide network of Alfa experts. All aspects of this system are monitored, including availability, performance, and task scheduling. We have built all aspects of the system to be highly available and deployed across multiple data centers and regions. We test the disaster recovery capabilities of the solution at least annually and we provide a complete report to our customers and auditors. Security is our highest priority and drives everything we do. The Alfa Hosting solution is operated in accordance with our ISO 27001 and SOC 2 audited processes and controls. An externally conducted penetration test is completed at least annually, and again, a report is provided to our customers and auditors. We also integrate with an external security operations center. This provides real-time machine learning-based monitoring of all of our infrastructure and traffic with a guaranteed SLA for alerting our own core teams.

So how can Alfa help set up implementation of a system for a customer? So at Alfa, we have designed and documented processes to enable rapid onboarding in Hosting. These processes are backed by outstanding technical support, our team of highly qualified experts who are responsible for managing the Hosting service. We support a wide range of clients with very different requirements, portfolios and system landscapes. However, we can adjust our approach to best suit each of our clients' needs. This enables us to plan each implementation using minimum time and resource from the client, but without compromising on quality and dependability. In other words, we do the hard work, whilst letting the clients focus on running their business. Within the Hosting operation, we work in a culture of continuous improvement to ensure our operational processes are performed at the highest level always. Our work reception process allows us to deliver a consistently high service to each of our clients, and we hold regular meetings with the project managers to ensure we continue to deliver to each client as expected. So in summary, our team, with their experience, our processes, and our structure collaborate to ensure we deliver the market-leading product, service and customer experience.

Alfa Hosting provides high levels of reliability and resilience, covering both infrastructure and operational processes. The technology used to deliver Alfa Hosting provides high availability across the entire stack and security is built into every component exceeding industry best practices through the use of an external security operations center. We use infrastructure as code approaches to fully automated environment creation and upgrades to ensure that every setting is identical, all the way from development through the test and finally, into production. Alison is now going to talk about the operational reliability side.

Thanks, Alex. So reliability comes from all of the technical aspects that Alex mentioned. But from an operational perspective, it also comes from the team's experiences, the processes and our structures, and all of those working together in harmony.

Thanks to Alex and Alison for their team's hard work on delivering a gold standard managed service. In the next few minutes, I'd like to drill down into how we develop the Alfa Systems platform. We've seen that evolving our technology and functionality has been key to our success, but that success requires good processes, practices and tools, so it's something we invest in as it enables a key differentiator for us. We're not building every customer their own version of Alfa software. There is one single global version of Alfa Systems used from our smallest client to our largest, from Stockholm to Sydney, from London to L.A. This means improvements benefit everyone, existing clients, new clients, and us, as we don't need to repeat ourselves on the next implementation. In this section, I'm going to try and balance keeping an appropriately high level overview of our technology, while digging in and demonstrating why it's part of what makes our product and our delivery so special. This outline of Alfa's organization chart represents the collaboration we need and encourage between our different teams. Not only do we have a single global platform, we have a single company working together to deliver customer successes, and through that, our own long-term success. Different teams throughout Alfa have clear responsibilities, but also collaborate on a daily basis, and this is facilitated by the cross-cutting communities of practice, shown in that striking teal color on this slide. Examples of our cross-company communities include security, covering best practices for secure coding and delivery, user experience, performance optimization, and approaches for converting legacy systems to the Alfa platform as part of a migration. That collaboration extends to not only working with our customers and end users, but also leveraging the best technology. Earlier, I talked about our key technologies, and I'll talk to you in a bit more detail in a moment. But here you can see there's a whole ecosystem of continuous integration and automation tools we use. We combine these best-of-breed tools with leading technology partners and open-source projects that we've build on and contribute to. These technologies play a significant role in baking security and quality into everything we do, allowing us to focus on delivering transformative business value to our customers rather than every developer having to worry about security, performance, and usability every time, which is the cost of entry that you need to pay in the real world of fintech enterprise software. Let's focus back on those core technologies to describe the journey of a typical development. We approach development iteratively, working with customers and end users as much as possible to get early reactions to the work we're doing. These short cycles allow us to be agile and fit our evolutionary approach of making small changes, adjusting the next iteration based on the feedback we've received. So when the team wants to start development, for example, the team working on the enhancements to support risk-free rates instead of LIBOR, they create a branch of our mainline. Our automated tests and approach to emerging changes mean the mainline is always in a working state, so the team can be confident they're working from both the latest version and a working version. And we follow the same approach, whether it's a top-down investment, a market or client-led requirement or bottom-up innovation. In the case of risk-free rates, it was based on market requirements and our desire to launch support for these products before any other software vendor, something we achieved with this iterative best-of-breed development process. Once they've got their branch, the team works on making the code changes to affect the change they want in Java and React, and this includes writing code that we never ship to customers. We write code to describe the testing that will verify the changes working correctly, and this is called test-driven development. Our build system can run that code to verify the change automatically, reporting its outcome with a simple red or green status, and this means we don't need a manual QA team. For example, this might be a test that the cash flow for a contract using a risk-free rate changes appropriately in response to particular inputs. All the changes are pushed to the branch in Bitbucket and verified by Jenkins. Once the team are happy with their changes, and the tests, both new and existing, are running green, they can request the changes emerged into the mainline. Further automated tests are run over the resulting code base. And if there's any conflict or failure, the change is rejected. Because the updated mainline only has code merged into it when it passes our checks, we know it's safe to deploy. And these checks go all the way up to starting the system over a real database and performing dozens of automated sanity tests. Once merged, we can do any further checks we want and then release it to our customers or deploy it into test environments within Alfa Hosting for them, where we work with our customers to make sure they have the control and audit evidence they need to satisfy their stakeholders, such as compliance teams and regulators. These loops are repeated multiple times per day and the tooling, some of which we've developed in-house, provides automation, which gives us repeatability and reliability. By ensuring all changes are written using test-driven development techniques, we know we have a rich automated regression test suite to ensure future changes don't break existing functionality. We write a test, which goes red on the branch, and iterate on the branch until it and the existing tests are green, and then it's merged. Continuous integration is how we are able to have the confidence to make dozens of changes to our software every single month. It's how we provide the feedback loop that ensures new features, fixes and refactoring don't create problems and how we can ship new versions without a 12-week regression test cycle. We've been regression testing every hour of every day automatically. The same approach to automation, repeatability and reliability applies to software upgrades and delivery just as much as it does to development. As I said earlier, every 4 weeks a new version of Alfa Systems is deployed at our customers, even if just to environments use for their own integration and test purposes. This is not only the case with our SaaS solution in Alfa Hosting. This is available to all our clients who we encourage to automate their infrastructure as well, something I'm pleased to see more of as our customers' IT teams embrace private cloud as well. If rolling out new versions happens often and becomes something of a nonevent, then while any individual release might deliver smaller amounts of change, it overall delivers the most relevant software. This comes from being able to respond to changes in business requirements more quickly with better feedback from end users who can more easily contribute when they can see both ends of the delivery process. Continuous delivery is all about setting up the infrastructure and processes to make shipping software boring, a matter of course, a habit. To encourage that deployment model, we need to make sure we maintain functional and technical backwards compatibility. And this is obviously desirable, but supporting this affects the overall software architecture, the software design process as well as the code itself. It has a significant impact on how one approaches development and can't just be retrofitted into an existing software delivery life cycle. So this gives us another competitive differentiator. It needs to be considered from the outset in the architecture of the platform, something we've done exceptionally well. I'd like to wrap up this section with us hearing from Lucy [indiscernible], one of our most senior developers and product architects. She will describe how working at Alfa within this development process on a strong technical platform with great developer tools and a collaborative culture makes a development role enjoyable. And the enjoyment of our development roles is critical as it affects both recruitment and retention.

What do I enjoy about working at Alfa? I'd have to first say, the people. I get to work daily with really great people who are experts in their field. And there's a genuine feel that we're making it better together and a commitment to deliver what our clients need, but also to continuously improve our product at the same time. Then is the culture at Alfa. Throughout all my time, I've always found it very inclusive and friendly, and I count many of my colleagues as personal friends. But I've also seen a real diversification taking place, and we benefited hugely from that with a lot of fresh ideas and different ways of thinking. Our recruitment team is really committed to recruiting the best candidates from all groups. And as a woman, I particularly appreciated the efforts to increase the representation of women in software engineering, and we're definitely moving in the right direction there. And then there's the technology. Day to day, I get to work with leading-edge technologies. And it's been really exciting to start to do more with the cloud. We're all encouraged to innovate and to explore new areas and techniques that might provide improvements in the future, and it's a great way of keeping my skills up to date. And then finally, the variety. I've worked at Alfa for a long time and I've experienced a lot of different roles. Some of them have been directly client-facing and some have been more development focused. It's really kept life interesting. And I feel that each of those roles has benefited from the skills gained in all of the others. Now I work primarily within our product engineering group. And there's a variety of software engineering challenges I encounter that is enough to keep me continually engaged.

Thanks, Lucy. In this first part of our Investor Technology Day, you've seen presentations showing what Alfa does and how it leads the way in delivering comprehensive and progressive support for the asset and automotive finance industry and that our leadership is growing. You've also seen how our platform is built and deployed using leading-edge technology and leading-edge techniques. And you've heard from some of our customers about our partnership and why Alfa Systems is so important to their business. Welcome back, everyone. The second part of our Investor Technology Day focuses on how the capability and technology comes together in a way that makes our customers leaders in their industry, both now and in the future. To start this off, I'd like to introduce 2 videos. First, you will see a demonstration of the system by Tom Minall, who will give you a feel for the user experience, the advanced functionality and the ability for our customers to adapt to their evolving needs through taking responsibility for Alfa's configuration. You will also hear from Shamim Mohammad, Executive Vice President and Chief Information and Technology Officer for CarMax. For our European audience, CarMax is the biggest used car retailer in the U.S. and has an incredible reputation for service innovation to create the best possible experience for their associates and customers alike. And following those videos, you will hear from Rich Dewire, our Chief Revenue Officer, on the customer view.

Welcome back. My name is Tom Minall, and I'd now like to take a little bit of time just to show you some of Alfa Systems. Alfa Systems has an extensive API, which means that the end-to-end life cycle of a finance contract can not only be managed through the user interface, but also via integrations with other systems and customer portals. This is demonstrated within the Alfa Self-Serve mobile application built to prove the principle of Alfa as a platform against which such customer portals may be developed. This application not only allows a customer to update their personal details, generate a quote for a new finance contract, but also manage any existing contracts that they may have. This includes tasks such as viewing their statements, requesting an early settlement quote, or requesting a payment holiday. We're now getting into the Alfa Systems application. I am presenting with my personalized user dashboard. From here, I can firstly see the workflow queues that I'm authorized to work. I, along with other members of my team, can take items from these queues in a priority order. At the bottom of the screen and on the next tab, we see a list of work items that have been allocated to me by Alfa's sophisticated workflow allocation engine. Alfa workflow can be used to model business processes within the application such that they can be performed in a repeatable and optimized way, whilst ensuring that regulatory compliance is maintained. When selecting a case from the queue, Alfa Systems will present me with the appropriate screen to perform the task associated with that particular step in the business process. In this case, I'm acting as an underwriter, where the automated decision engine has determined that a manual review is required prior to approval. And so here, Alfa takes us directly to the underwriting screen. The underwriting screen provides the key information required for an underwriter to make decisions effectively and quickly, whilst being able to navigate to find more details about the customer or the credit application, should this be required. Detailed information about the customer may be reviewed, including a real-time view of all the contracts that the customer may have in place with the finance company. Alfa Systems is highly configurable, with this configuration available to be performed within the application itself. This allows business-focused users to make continuous updates as we offer new products to the market, look to optimize business processes, or adapt to changing regulatory conditions. Let's, for example, take a look at the configuration of a workflow. The workflow visualization, which is generated by the application as the business process is configured, allows the user to view the workflow as it is created. Alfa workflow provides the opportunity for high levels of automation with system actions, which are represented by the gray boxes within visualization being performed automatically by the system without requiring user interaction. Business rules may be configured within the workflow to only provide the ability to specify variations in business process for different products or different countries, but also provides the capability for systemized eligibility checks. For example, we can have business rules within this workflow to determine whether a customer is allowed to apply for a payment holiday based on considerations such as whether they are up to date with their payments or whether they have previously requested payment holidays in the past. Combining this capability with the extensive Alfa Systems API means that customers can be given the opportunity to request such changes to their contracts via a customer portal or a website without needing to speak to a customer service representative. This not only reduces operational costs for our customers, but also ensures that changes are only applied within policy, and instant feedback is provided to customers. Ownership of the application by our clients is encouraged. And clients are supported in this by the extensive amount of documentation, which is available within the application. This includes configuration guides, user manuals, an accounting handbook, and a detailed API catalog, all available online within Help section of the application. It's also contact sensitive, meaning the screen presented is the relevant page depending on where the user is within the application. One of Alfa Systems' key strengths is the ability to support clients with portfolios in multiple countries within a single instance of the application. Alfa Systems provides comprehensive multi-regulatory, multi-currency, multi-accounting standards and multilingual capability. When accessing the Alfa Systems application, the default language presented to me will be that associated with my browser. It is, however, possible for me to select some alternative language from the user menu, and I can see the screen update for that language and the associated display standards. This includes dates and financial amounts, which will all show according to the selected locale. Alfa also ensures that communications are sent to customers according to their language preferences, and that the configurable components within those communications are presented based on the uploaded translations. Alfa Systems' extensive reschedule functionality allows contracts to be updated in line with a higher degree of flexibility and control. With dozens of common scenarios, reschedule will just provide a highly simplified and streamlined approach to applying these changes. For example, applying a payment holiday can be performed extremely simply. Thanks very much for your time. I hope you found that interesting.

I'm Shamim Mohammad. I'm the Chief Information and Technology Officer for CarMax. I'm also one of the Executive Vice Presidents for the company. So we were looking to build a platform that will allow us to grow as our business is growing fast. So we looked in the marketplace. And after very careful consideration and evaluation, we selected Alfa because we felt that, that is a great platform for us to innovate from for the next couple of decades. And we're very pleased with their technology capability, their focus on innovation, their focus on ESG, and the overall match between the two companies' culture really helped us make a decision. And I've been very pleased with working with them over the past few years. CarMax has been disrupting the automotive industry over the past 25 years. And as we continue to disrupt our industry, we looked at Alfa. Alfa is a highly innovative company as well, and they are helping us innovate at a fast pace, so that we can remain a disruptive force for our industry. CarMax is very focused on customer experience and associate experience. We are Fortune 100 best place to work for 17 years in a row. So with Alfa, we are changing the experience for our associates. So they have a simple, easy, seamless experience with the technology as we continue to disrupt our industry. ESG is very important for CarMax and the culture is something we pay very close attention to. So the partners such as Alfa, it is very important that they have similar focus and similar priority around ESG and the overall culture of the company.

Hi, everybody. So I hope you enjoyed hearing from Shamim about his experiences with Alfa, and actually, CarMax has successfully gone live with Alfa since he recorded that video. They're our newest live client. My name is Rich Dewire, and I'm the Chief Revenue Officer for Alfa. I'm responsible for marketing, sales, and commercial teams on a global basis. I've been at Alfa for a little over 20 years, starting out as a junior developer on version 3 of Alfa, then working my way through a variety of roles, implementing the Alfa systems for a range of clients across the globe, before arriving in my current role. So Matthew has talked about the asset finance market and then Andrew talked about ways that Alfa Systems platform fits together technically. But the reason why a Chief Revenue Officer is talking on a Technology Day is to bring a sales point of view. So to talk about how our software allows us to make sales and to give a flavor of the kind of areas that our prospects really focus on when they're selecting software for their business. The first point to address is the technical stack. So back in 2010, we had a really well-developed set of functionality. But in common with most of our competitors, our technical stack wasn't really future facing. The business would love the things that Alfa Systems could do, but it was becoming increasingly clear that customers, both large and small, they were becoming more tech savvy, more demanding. They needed to know that their data was going to be secure. They needed to know that the data was going to be integrated into a wide systems landscape. And they needed to know that the system they were investing in wasn't at risk of technical obsolescence. And with V5, we stepped ahead of the competition, and we changed what could have been a weakness into a real strength. And we've built on that strength ever since. So what was previously a somewhat difficult set of discussions with the clients' IT department, well, it's now become at worst a simple box tick. Yes, that all looks very sensible, no problem. But actually, more often, it's a real positive. The technical stack is really easily understandable to the IT department. It's built with well-known market-leading tools. You heard Andrew cover Java and PostgreS, Jenkins, Bitbucket and AWS for Hosting. So their team already have familiarity with what's being proposed. And actually, what we're finding is that we've got a good answer for pretty much any question that the IT teams can fire at us, and often with real-world examples of other clients that have already done it. Can you operate at scale? Yes, we've got a client over in the U.S. with a huge 4.6 million contracts running on Alfa. Are there limitations to your cloud version of the software? Well, no, because we've only got one version of the software and it's completely cloud native, and although our Hosting solution is based on AWS, we do have clients that are hosting themselves on Microsoft Azure. In fact, the more questions that they ask, the more opportunity we have to get our experts in infrastructure, in hosting and in information security in front of them, and we really dazzle. We're told by new clients that other providers simply don't have the ability to do this. Many of our competitors haven't moved on in the same way, so they're still working with legacy technology. And although they might have put a front end over the top of it, which uses new technology, well, maybe that's only really a sticking plaster. As Alex Barnes said earlier, getting infrastructure to be a differentiator is unusual, but with sustained effort, particularly around Hosting, that's exactly what we've achieved. And the reason why I highlighted where we've come from is that the transformation we went through to get there is hard. Matthew talked earlier about the fact that throwing away the existing version and starting again, well, that really might be seductive, but it's been shown again and again to be very prone to failure. So we took that difficult technical route of writing an automated conversion tool. And that was only possible because of the talented engineers overseeing the change and with an awful lot of very hard work. But that work is now done. And because we've built version 5 in a future-proof way, we're not going to need to do it again. Actually, instead, as Andrew talked about, we can constantly evolve on a technical stack that we know is going to see us through many years to come, whereas those competitors of ours that remain on the old technology, they've got a hugely difficult and quite risky task ahead of them if they want to catch up. Now I mentioned the information security a moment ago, and I just want to highlight that as a particularly important area. Indeed, it's the area in which we're seeing the greatest expansion of client requirements, especially when we're going to be hosting their precious data. Clients have to know that we've got solid practices in place and that they can trust us. So we're continuously investing in this area, both to achieve the industry standard compliance ratings of ISO 27001, 27018 and SOC 2, but actually to go further than just getting the certificate, so that we're meeting or exceeding the requirements that any given client can throw at us. Penetration testing was an example that Alex Barnes mentioned earlier. Again, it's the quality that runs all the way through our company that means that we can take a potential difficulty and turn it into a strength. And our prospects tell us that we regularly outperform our competitors in this area. It's also that technical stack that provides the foundation for another U.S. peer of ours, that of connectivity. Alfa is truly digitally enabled. So you heard Neil from Close Brothers say they needed Alfa to integrate to several other systems. And actually, they're really representative of pretty much all of our clients and all of our prospective clients. They're part of a wider organization. So it's important that they can connect their contract management system to all of their other systems. So they might need to feed data into a common general ledger. They might need to run reports over data in both Alfa and other systems of record. So they've got to have the ability to pull data into a shared data warehouse. They might need a single bank portal to be able to access details of a customer's current account and mortgage and asset finance deals, so they can present that single view to the customer. They might need a CRM system to be able to request a settlement quote for ending a contract early. Alfa has invested heavily in creating extensive API catalogs that allow all of these integrations and far more. In fact, pretty much all of the transactions that a user can do on Alfa can also be done from an external system by calling a web service. So Alfa has a really compelling proposition, particularly given the IT departments are increasingly looking to break down these huge projects into smaller, less risky chunks by replacing one system at a time. And in order to do that, you do need a system that you can slot in without needing other systems to be modified. The platform nature of Alfa Systems has been a key element of several of our recent sales successes with clients telling us that our modern technology gives us that edge over our competitors. The last area I wanted to particularly highlight is the breadth of our functionality, the sheer number of different use cases that Alfa can accommodate within a single system. Matthew has already described the fact that the asset finance market is a specialist one, but at the same time, an incredibly broad church. So traditional equipment finance is typically business to business, and it has products that include leases, operating leases, high purchase and loans. Auto Finance is more commonly business to consumer, although it does include financing for fleets of vehicles and also brings in products such as contract hire and flexible arrangements such as PCPs, plus the new wave of mobility products that you're going to hear Sebastian from Deloitte talking about a little later. Consumer finance then deals with smaller assets and brings consumer credit regulation into the picture. So these 3 sectors are different enough that in the U.K., the Finance and Leasing Association is split into those 3 streams. And actually, in the U.S., they are completely separate industry bodies serving each one. And that's all before you include the geographical variations of accounting or of product legislation or of accepted business practices. So where Alfa really excels is not just covering that huge range of functionality, but allowing for all of it in a single platform. Our competitors tend to either serve a smaller set of markets or to serve multiple markets, but with different products, even if they might say it's only one. That makes us hugely attractive to prospects with multiple business lines or with ambition to diversify. Over the last 30 years, we've built in support for a massive range of financial products and processes, all in a configurable manner and with the client in control of that configuration through the system itself. So that means that where we have a European customer in 13 countries where they're running a single version of Alfa, and they're trained, so they now can roll on new countries pretty much by themselves without reliance on us by just adding configuration. And similarly, and we believe uniquely, where a vehicle financier over in the U.S. has both a car finance and a truck finance portfolio, so they're covering both auto and equipment finance, they can also do that on a single instance. And even better than all of that, building in this configurable way has meant that not only do we cover those products and those processes, but they can be mixed and matched to provide virtually unlimited options. Alfa is really, really flexible, hugely versatile, and it means that there's seldom a circumstance where a new product or a new process can't be supported in some way. You heard Daniel Bailey from Arkle talking about the fact that they only needed one tweak to their system to support their business. And because we've got a single product that serves multiple markets where we can lead as well, quite often what we see is the auto finance industry is a little more innovative in the solutions that they want to offer. But once we built that into Alfa Systems, well, we can then suggest those same innovations to the equipment finance market. Our competitors can't do that. They don't have a single product. They can't take functionality created for one vertical or one geography and use it in another. Obviously, there's always more that can be done. We're constantly looking at the next growth area, be that our recent expansion into wholesale financing or future target areas, which might include adjacent products like commercial loans or factoring, fleet management or subscription products. Much of the base functionality for those products is already part of Alfa. So mostly, it's just the case of pulling together the right combination of configuration and adding together some custom modifications to the platform in order to give it a tailored view. So that technical platform, that functional coverage, the flexibility, the continuous expansion that allows us to provide a really truly unique offering to our markets. You're going to hear Sebastian from Deloitte explaining that these things are all critically important to customers. So that, along with our delivery track record, makes selling the software an awful lot easier. For large customers who either want to support a variety of products or a variety of geographies or both, they can buy a single instance of Alfa Systems and it can run multiple business lines. It brings them significant economies of scale in their IT and their operation spending. And actually, for all of our customers, large and small, it offers incredible growth potential. Customers can expand into new business lines without needing a new IT system to support them. You heard from Shamim from CarMax talking about how important growth is to them. All of these are key reasons why we are securing multiple global business relationships with leading finance providers in multiple markets and why those relationships, like the one with Close Brothers, are typically well over 10 years long. So from my point of view, the quality of Alfa Systems, both technically and functionally, well, that puts us in an excellent position during the sales process. It allows us to operate as a premium provider and allows us to contract with favorable terms. The markets that we're in are wide and they're deep, and we're really well positioned to take advantage of the changes that might come along. So we're now going to see a video from Russ Fitzgerald, the CIO of one of our newest clients, Hampshire Trust Bank, who used the Alfa Start methodology that Sarah spoke about earlier, to get Alfa Systems up and running very quickly for them. And then you'll hear from Sebastian Pfeifle, the Global Auto Finance lead from Deloitte, talking about what Deloitte sees as the key drivers for the asset finance software market.

Hi, my name is Russ Fitzgerald. I'm the Chief Information Officer for Hampshire Trust bank based here in Bishopsgate, London. I look after technology, change, and various aspects of the back office support team. Well, a year on from going live, it feels much longer, to be honest with you. It's robust, scalable, it's working well. We have a great team working on both sides of the operation, regular updates and upgrades to the platform, be it through the configuration or for changes that we ask for. So things are working well, and it's helping us improve our operational effectiveness. Alfa Start brought to HTB really actually probably the fastest ever implementation that we've ever done, unbelievably from contract to going live, in about 4 months. Never seen anything like it. I was quite nervous for the prospect of doing it. We've got a platform that's "touchwood" never had a production incident, it's taking the business out, and it's positioned us extremely well for the future. I would say to '21 looking to implement Alfa Start, to follow the model that's deployed by the Alfa team, and be led by a great team. We had a superb project team that led the delivery, coupled by some amazing resources in HTB. And certainly, the focus on that and on delivery and the drive and passion that was taken by the Alfa team was key to success of the time frames in getting Alfa Start running. Did Alfa deliver on their promises? Absolutely, they did. We're very pleased with the product. As I said, we've got a very strong team supporting us at Alfa. There's two things that come with it, and we've got multiple suppliers. Alfa, by far and away, the best performing partner that we have, both in terms of behaviors that they operate with our organization, they're extremely professional. Frankly, they're not the cheapest, but you get what you pay for. My only ask of them is, we'd love to see a mortgage platform and a savings platform, please.

Hello. My name is Sebastian Pfeifle. I'm a partner with Deloitte. I'm based in Berlin and Germany and I serve as the Global Auto Finance Lead for Deloitte. In the asset finance software market, as we see it, the market demand and the customer demand is shifting rapidly from the traditional asset-based financing, more towards the flexible usage-based model. And that has a severe implication on the software market as well. So customers are looking for software that is flexible, that is easy to use, that caters for new products, that offers the possibility to offer customer self-service, and that's also able to integrate into a variety of different back-office systems, including new customer relationship management systems. Well, a strong integration capability is absolutely key to success in the market. We're seeing a heterogeneous IT landscape of most of the players, and they're also bringing in new software like, for example, new customer relationship management systems, but also different go-to-market, different front-ends, omnichannel front-ends. So integration capabilities are absolutely key.

Before we get into the Q&A and wrap up, I'd like to summarize where we are today and where we're going. As you've heard throughout today's session, our software products is based on a strong functional platform with 30 years of functionality baked into it. We've grown from supporting complex commercial asset lending structures into supporting multiple verticals, multiple geographies, and multiple finance products in a single global platform that provides the breadth of functionality for an omnichannel customer experience and the flexibility for our customers to take ownership of their business processes and system configuration in an easy-to-use application. We've distilled all that experience into a quick to implement solution with Alfa Start using the existing Alfa Systems product, so our customers can leverage the full power of our platform as they grow. And we've heard that story from our customers, proving our story of our reusable platform and how it delivers best-in-class flexibility, reliability, scalability, and security. You've also heard how that single global product is based on an evolvable technology platform that goes from strength to strength. A rich code base that we can reuse for other markets while still providing a consistent API supporting digital mobility solutions and integrating within a heterogeneous landscape and a platform that is continuously deliverable, continuously evolvable, and continuously adaptable to the opportunities in the future. Alfa Systems continues to evolve and grow. And although I've been involved in lots of exciting things at Alfa over the years, from the creation of V5 to the setting up of Alfa Hosting, I'm even more excited about the future. There are massively interesting functional and technical solutions to create in building and evolving a single global platform. As we grow into more markets, we have more opportunities to create those solutions, and we benefit from the compounding effect from each change, making the platform stronger, as Rich talked about. Given our strong functional and technical platform, we are already well placed to take advantage of the changes coming within the wider industry. For example, car sales are moving increasingly online, providing a direct-to-consumer channel. And as we heard from Sebastian, mobility services are of growing importance in the auto space. Our digital approach, based on an open API, with a flexible functional architecture, hosted on a scalable platform, provides a unique offering in our industry. We can use our modularity as a platform to further develop into newer markets such as commercial lending, as well as continuing to develop in the existing markets with improvements in originations and collections. And we can deploy Alfa Systems with Alfa iQ, our joint venture to explore AI and machine learning solutions in asset finance to leverage the power of the data in our platform with AI-driven insights. IQ are currently in the middle of defining and developing go-to-market propositions that deliver real financial value. I said earlier, our core feature was adaptability, but it's actually our superpower. We have a flexible, powerful product that delivers transformative customer value today and that we can continue to build and iterate on to deliver future value tomorrow. Thank you. Before the Q&A, we'll hear from Paul Bartley, Managing Director, Asset Finance of Hampshire Trust Bank, on why Alfa is the right choice. He's had an illustrious career. I've seen him choose us not just once, but at 3 different customers. ING, Close Brothers, and now HTB, demonstrating the value he sees in the strength of our platform and our delivery record.

Hello. My name is Paul Bartley. I'm the Managing Director of Hampshire Trust Bank Asset Finance. Well, we're a year in. It's been an excellent experience. We installed Alfa Start in very short order, in around 3 months. We did that in the first quarter of 2020. We went live early March, and then unbeknown to us all, COVID hit us in mid-March. Everybody was sent home. So we had an awful lot of challenges on our plate. I'm very delighted to say that had we not put Alfa in, things would have been a lot more difficult. And Alfa has brought a number of things to Hampshire Trust Bank. The first is stability of systems. The second is reduction of operational risk. The third is greater efficiency. And the fourth, and to me one of the most important, is the ability to offer more flexibility in our products to both our brokers and our customers. So this is the third time I've bought Alfa. The reason I keep choosing Alfa is that they are, in my view and the view of my staff, the Rolls-Royce of systems. The experience that I've had working with Alfa way back in the early days of the early '90s, when I first used Alfa, and all that time that I've had working with them, and all the experience that I've gained of how they operate, how they support their clients are the reasons why I've bought it for a third time. In all the cases that I bought into Alfa, and particularly in this case, they've absolutely delivered on all their promises and in fact gone above and beyond that. And the reason I say the most recent is because in that COVID scenario, where both Alfa and HTB staff were all having to very rapidly move to a home working environment, the support that we had there to enable us to embed that new system while still working from home was superb. For those people that are thinking about using Alfa Start, I would say that, one has to, for oversight purposes, review other options in the market. Of course, nobody can just go straight for one option. So you have to evaluate, but you have to evaluate the wider view of what Alfa brings to the table compared to many others. And I think that it's worth that diligence in looking at the wider picture of what Alfa can do to support your business.