CSC forms core banking alliance with SAP; adopts IFX open standards

Continuing its focus on providing banks the flexibility they need to integrate, migrate and update application functionality based on an integrated platform, SAP AG (NYSE:SAP) today announced an alliance with Computer Sciences Corporation (NYSE:CSC).

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The alliance will address the growing need for banks to differentiate themselves through strategically optimized product pricing. The collaboration between the two industry leaders will bring together the SAP Price Optimization application with CSC's Hogan Core Banking System, simplifying CSC clients' access to sophisticated pricing options. The announcement was made at the BAI Retail Delivery Conference and Expo, taking place in Las Vegas, Nevada, November 13-15.

The overall collaboration will complement CSC's Hogan Core Banking System, which is high-performance banking software, with the strength of technology and banking applications from SAP to help banks improve their productivity, manage change and optimize their core processes quickly. The goal of the alliance is to provide banks the flexibility they need to integrate, migrate and update application functionality based on strategies to consolidate and streamline platforms. The joint offering will focus on providing a tool suite that can predict optimized pricing scenarios across banks' product portfolios. SAP and CSC have focused on pricing to help banks find better ways to generate new revenues and increase product sales through improved strategic and operational impact analysis of loan and deposit data. In today's environment, pricing is critical to banks' success, and the traditional pricing models are not sophisticated enough to shift rapidly with frequent market changes.

The SAP Price Optimization application goes beyond traditional pricing offerings. It focuses on critical components of banks' strategy, such as risk management, asset and liability management, customer relationship management (CRM), sales management and profitability to measure the impact of these dynamic factors simultaneously and flexibly. The application takes pricing factors into consideration and statistically determines the price elasticity of a product. It considers pricing factors such as demand modeling, seasonality, customer behavior, current market rate and competitive analysis. The end result is a set of product rates for the various sales regions. These optimized rates align with banks' go-to-market strategies and scientifically support their desire to increase profits, volume or profitable volume.

"Interfacing CSC's Hogan Core Banking System with the SAP Price Optimization application gives a large percentage of the world's top-tier banks easy access to tools to improve their agility and reduce customer attrition with attractive retail banking market pricing," said Jim Cook, president of CSC's Financial Services Sector. "This is another example of CSC's continuous innovation to help our clients generate new revenues from their financial product portfolios."

"In a fragmented market, this alliance will offer pre-integrated components that minimize implementation time and cost," said Thomas Balgheim, head of global banking line of business, SAP AG. "Banks have worked hard to reduce costs and increase revenues, and yet they still struggle to differentiate themselves. Price optimization technology revolutionizes how banks price products in the market and ensures that no money is left on the table in customer sales opportunities."

Separately, Computer Sciences Corporation (NYSE:CSC) today announced that it will incorporate the Interactive Financial eXchange Forum's IFX standards as part of its service-oriented architecture (SOA) strategy in banking and payment software.

Adopting open standards such as IFX makes it easier for CSC's financial services clients to reuse software and move data between systems, thereby improving agility, flexibility and time to market.

CSC will use IFX standards as the foundation to develop Web-service interfaces for the company's Hogan Systems core banking software, CAMS II Card & Merchant System and CheckVision, CSC's check-image delivery and archive software. When complete, the three CSC systems will help clients connect to multi-channel third-party software and with business partners and providers more efficiently. Banks and payment processors will be able to share financial data regardless of technology platform. Clients needing to update their technical architectures quickly will have access to a preconfigured package of CSC services, business processes and technologies.

"Banks that use multi-channel integration strategies, and business process management (BPM), service-oriented architectures and BPM-enabling technologies should use IFX to promote data standards across channels," said Gartner analyst Stessa Cohen in a July 2 report, "Hype Cycle for Banking and Investment Services Front-Office Technologies, 2007." "Banks should evaluate vendors for their use of IFX protocols in data integration and messaging functionality."

"Our strong commitment to SOA and the IFX open standard is driving innovation and new CSC offerings that will improve the ability of top-tier banks and payment processors to leverage the rich functionality of our applications," said Jeffery Schwalk, vice president and managing director of the Banking division within CSC's Financial Services Sector. "Incorporating IFX open standards into CSC's applications will help our clients seamlessly integrate our systems with other best-of-breed software."

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