FRS ANNOUNCES RECORD RESULTS FOR 2002

S1 Corporation Business Unit Well Positioned To Address Emerging Regulatory and Financial Reporting Challenges For Global Banks

London. 17th February, 2003 – FRS, a business unit of S1 Corporation, and a leading global provider of regulatory and financial reporting and analytics solutions to more than 600 financial institutions around the world, today announced record financial results for 2002.

In 2002, FRS total revenue grew more than 20% compared to 2001 with license and subscription revenue growing in excess of 35% compared to 2001. At the same time, FRS was also able to substantially improve overall profitability while continuing to increase investment in sales, marketing and new product development.

"2002 was a break-out year for FRS," commented William A. Soward, FRS general manager. "Our extensive knowledge of local regulatory and financial reporting requirements across 23 countries along with a proven delivery capability has helped us to consistently win new business. As we enter 2003, we are uniquely positioned to help global banks deploy not only local but also regional and headquarters regulatory and financial reporting solutions that provide the foundation for Basel II and IAS compliance across the enterprise.

2002 Operating Highlights:
Signed 30 new customers across the globe, during the year, including nine new customers in Q4 2002 alone. Notable FRS wins includes BBVA, BCEE Luxembourg, Banco Mais, Banco Popular Español, Banque Privée Edmond de Rothschild, EFG Bank, TD Waterhouse, Toronto Dominion Bank and UBS. FRS now has more than 625 financial institution customers including 37 of the top 50 European banks and 55 of the top 100 global banks.

Opened new sales and consulting offices in Hong Kong and Dublin, Ireland, expanding the total number of FRS offices to eleven around the world.

Introduced FiRE Release 2.0, which offers customers, increased usability and additional audit capabilities. FiRE 2.0 is already deployed at over 150 customer sites.

Established FRS as an autonomous business unit of S1 Corporation, with dedicated sales, marketing, product development, finance, human resources, IT and executive management team.

FRS Strategy:
FRS is targeting the Corporate Performance Management (CPM) market for financial institutions. This emerging market addresses the imperative for institutions to improve global results through the optimisation of capital and risk, while also complying with evolving country-specific regulations and emerging industry standards.

"The corporate performance management processes and requirements are changing for financial services providers (FSP), affecting architecture and infrastructure requirements for their support," stated Gartner’s Mary Knox. "FSPs that seek to address new CPM requirements by simply layering on additional systems and processes will increase complexity and reduce timeliness, consistency and actionability. Successful CPM requires a tight alignment of business strategies and business intelligence processes with IT architecture and infrastructure. This will drive FSP enterprise integration and consolidation efforts to produce comparative, timely and actionable performance evaluation and reporting." Gartner, Challenges for FSP Corporate Performance Management, May 2002.

Historically, banks have attempted to address these challenges by combining in-house developed solutions with point products delivered by regulatory reporting, risk management and profitability vendors. This fragmented approach has become increasingly impractical as institutions attempt to address several new challenges and requirements:

Basel II Directive: The Basel Committee on Banking Supervision (BCBS) is developing a revised Capital Accord, (referred to as Basel II). The new regulations will bring internal practice and regulatory requirements into much closer alignment and will mandate, for the first time, the collection and use of extensive data surrounding a bank’s risk assessment and management practice.

International Accounting Standards (IAS) Compliance: In the EU, International Financial Reporting Standards (IFRS) will become mandatory for all listed firms by 2005. This represents a major change for most institutions and will introduce new challenges to manage and reconcile IAS with local GAAP reporting.

Increasing demand for data consistency: Institutions increasingly need a single source of consistent financial data to provide users across the extended enterprise with timely business insight. Building a robust data foundation across regions and business lines is especially challenging.

To confront these challenges, global institutions are increasingly looking toward solution companies like FRS to provide a pre-built suite of CPM applications, including regulatory, risk, and performance solutions that are driven from a common data foundation that is optimised for complex, multi-country organisations.

For more than 15 years, FRS has operated exclusively within the global financial services marketplace, providing institutions with a unique suite of financial reporting, business intelligence and analytical solutions. FRS has dual headquarters in Brussels, Belgium and Charlotte, North Carolina and currently employees more than 105 professionals in eleven countries. FRS market coverage is enhanced by a number of strategic alliances including BearingPoint (Germany and Switzerland), KPMG (Czech Republic, Greece and Poland), Banksoft (Hungary) and Perago (South Africa). FRS is a business unit of S1 Corporation, headquartered in Atlanta, Georgia.

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