IBM (NYSE: IBM) today unveiled the first unified software platform to help banks be more efficient, improve their flexibility and adapt more easily to new business challenges and regulatory requirements. Part of the IBM Smarter Planet strategy, the new platform enables banks to simplify the modernization, management and monitoring of their technology systems, while lowering risk by avoiding the disruptive business consequences that have characterized these activities in the past.
IBM's Banking Industry Framework gives banks an alternative to the traditional high-risk, rip-and-replace approach. The framework uses a progressive transition with industry proven data and process models already employed by more than 250 financial institutions. As a result, banks are now able to safely and securely upgrade their infrastructures on the fly.
Among the most compelling features of the new IBM framework is that it focuses on the heart of the infrastructure, where the maintenance and management of core banking systems typically account for over half of total IT spending. Not only are these costs a drain on potential funds for improvement and innovation, but they are continually rising as banks continue to modify and patch aging core systems - increasing their complexity. Banks have been reluctant to consolidate these legacy applications because it is difficult and disruptive.
"There is a key need in the banking industry for a common platform that can span multiple areas within an organization and help harmonize the siloed systems that have resulted through years of mergers, acquisitions and piecemeal infrastructure enhancements," said June Yee Felix, General Manager, IBM Banking and Financial Markets. "Banks are seeking ways to work smarter and the IBM Banking Framework provides a flexible unified software platform that can help them anticipate clients needs while reducing the costs of developing, operating and maintaining the systems that span the front, middle and back-office operations."
The new platform breaks through the "silos" that often exist between a bank's departments, allowing true data transparency and application sharing. For example, when using the new framework, staff within one part of the bank will be able to track transactions across multiple business lines in order to identify fraudulent activity before it happens, while other staff elsewhere in the bank can use those same analytic tools to understand customer behavior and pd preferences.
The IBM Banking Industry Framework addresses four key areas that demand the majority of a banks attention and resources, providing a path to accelerate transformation, and system upgrade with an eye towards future needs and reduced project risk. The features of the framework include:
Integrated risk management to support a holistic approach to managing financial risk, operational and IT risk, financial crimes detection and prevention, and compliance.
Customer care & insight to help banks build a foundation for creating a single view of the customer and enabling more effective and efficient sales and service.
Payments and securities to help banks progressively transform their payments operations to become more flexible and efficient.
Core banking transformation that allows banks to modernize and renovate existing systems that sustain core banking functions while aligning with the changing needs of the business.
The Industrial Bank of Korea (IBK) came to IBM looking for a way to differentiate itself by packaging its products and services to be better suited to individual customer needs. The bank already had the data it needed to tailor packages for its customers but it was scattered across a host of legacy applications and as a result the bank was unable to get a holistic view of its customer needs. By using the IBM Banking Framework, IBK intends to utilize a single, integrated view of customer data to ensure consistent customer information, effective marketing campaigns and improve their work processes.
IBM recently assisted Jyske Bank in modernizing their payments systems and infrastructure to achieve Single European Payments Area (SEPA) compliance. By using the IBM Framework approach, Jyske Bank has taken the first step to renovate its payments structure and consolidate a number of payment systems into one common payment solution, handling all payments in the bank.
"We have increased our SOA readiness in the payments area, and have now got a good foundation for a common payment solution with high reusability between different kind of payment processes, both in the international and in the domestic area," said a spokesperson from Jyske Bank. "We will continue the development and consolidation of Domestic, International and Corporate Payment systems and processes."
In today's digital world, new levels of collaboration, insight and dynamic business process are required to improve business agility and help companies respond faster to changing business needs. The framework is the software technology backbone that makes a wide range of smart banking solutions possible, utilizing the full spectrum of IBM's software portfolio including WebSphere, Tivoli, Rational, Lotus, ILOG and Information Management products.
The IBM Banking Industry Framework provides proven integration between IBM framework middleware and industry-leading partner applications from key Independent Software Vendors (ISVs). These ISV's have joined with IBM to help our banking clients successfully solve today's most challenging business problems. The combined IBM and ISV solutions offered by the IBM Banking Industry Framework enable our banking customers to speed time to market, reduce development risk, lower development costs, and improve their return on investment.
A key element of IBM's recently announced Smart Work initiative, the new framework is designed to help companies optimize their business to achieve new levels of productivity by marrying collaboration between people with the business processes that are at the heart of every organization.