Bank of Scotland Celebrates First Year Using Pegasystems' CRM Technology; CRM Solution Has Boosted Productivity by 35%.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 4, 1999--

Pegasystems Inc. (NASDAQ:PEGA), a leading provider of Customer Relationship Management (CRM) solutions, today announced that Bank of Scotland has celebrated its first year using Pegasystems technology, which has enabled it to achieve greater operational efficiency and improved customer service. In production at the bank's Support Services Division since July 1998, the solution automates activities related to standing orders, direct debits, and bill payment for Bank of Scotland's entire retail branch network.

"Centralizing all our operational services in one division has helped us to achieve substantial economies of scale," said Donald Graham, Head of Central Support, Bank of Scotland. "By using Pegasystems technology to automate routine processes and also to help staff members respond quickly to incoming inquiries, we have succeeded in increasing productivity levels by a further 35%.

"We have also achieved major improvements in customer service by cutting turnaround times, eliminating backlog and reducing error rates," he continued. "Overall, we are delighted with the robustness and reliability of the system, which we are now also using to scan and index the documents that make up branch customer files. Our plans are to extend the technology to cover many of the back-office processing functions we carry out for other areas of the bank."

The solution at Bank of Scotland uses PegaWORKS, Pegasystems' patented rules-based workflow engine, to automate the processing of branch requests. Pegasystems' middleware product, PegaCONNECT, achieves seamless online connectivity between the bank's core processing systems and other technology components. Using PegaREACH, Pegasystems' graphical user interface (GUI), staff members can view the status of each transaction and other information held within the bank's databases without having to switch from one application to another.

David Wells, Vice President, Pegasystems Europe, commented: "We are delighted to have played an instrumental role in helping Bank of Scotland support their CRM strategy, optimize operational efficiency, boost staff productivity, and improve significantly the quality of their service delivery. We're proud of the relationship that exists between our respective companies, and we look forward to working closely with Bank of Scotland on additional projects in the future."

About Pegasystems

Pegasystems is a leading provider of Customer Relationship Management solutions. These solutions allow large organizations to better manage customer interactions, and to automate the business processes within their sales and service delivery operations. Many of the world's largest institutions use Pegasystems' solutions to manage mission-critical customer activities. The Pegasystems solutions support multiple channels of customer contact, helping organizations improve staff productivity, operational efficiency, and customer satisfaction. Pegasystems' solutions are Internet-enabled, and operate in multi-tiered, client/server environments.

Pegasystems' headquarters is located in Cambridge, Massachusetts. The company has regional offices in North America, Europe, and Australia. Access Pegasystems on the World Wide Web at www.pegasystems.com.

Forward-Looking Statements

Except for the historical information contained in this announcement, the matters discussed in this announcement are "forward-looking statements" (as that term is used in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including risks of implementation and acceptance, as well as those detailed from time-to-time in Pegasystems' filings with the Securities and Exchange Commission (the "SEC"). Pegasystems draws the reader's attention to the factors described in its annual report on Form 10-K for the fiscal year ending December 31, 1998 under the heading "Certain Statements for Purposes of the `Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995." Any such forward-looking statements speak only as of the date such statements are made, and the company undertakes no obligation to publicly release the results of any revision to these forward-looking statements.