IBM Launches Three New Banking Centers Of Excellence To Improve Client Experience

Acting on consumer and market research, IBM (NYSE: IBM) today launched three new Banking Centers of Excellence (BCOE) to help financial services clients modernize aging computing systems and develop new business models to better meet the needs of banking consumers.

IBM has made a multimillion investment in the new centers housed at IBM’s Silicon Valley, CA and Poughkeepsie, NY laboratories and launched a new lab in Seoul, Korea. Clients and independent software vendors (ISVs) can now access the centers directly or virtually through a worldwide network of IBM High Performance On Demand Solutions (HiPODS) software labs and Advanced Client Technology Centers hardware labs across Europe and Asia.

The BCOE is a direct response to the many global business challenges banks face today including global competition, a fluid regulatory environment, rising operating costs and growing consumer indifference about their banking relationships.

For example, IBM Global Business Services and the IBM Institute for Business Value recently published research results showing US banking consumers don’t feel valued by their bank and are unwilling to commit to deeper relationships with them. The research concludes that banks must forego traditional approaches to customer relationship management and focus more on understanding and improving the overall customer experience. Based on this research, banking consumers are now saying they want their banks to meet the following needs:

-- Show you appreciate my individual business.
-- Listen to my needs.
-- Advise me how to achieve my goals.
-- Follow up on issues -- and fix them!
-- Give me personal attention and personalized financial products.

Two primary roadblocks banks face in trying to better understand the customer experience are aging banking application systems that don’t easily share information across banking channels and traditional customer relationship management practices that focus more on functional services like loyalty and retention programs instead of new processes that capture and improve customer experiences.

The BCOE will work with banks to help design and implement next generation back office systems, transforming their legacy application software to flexible, open standards-based core banking and payments solutions. As a result, banks can more quickly adjust to shifting market conditions, lower operating costs and achieve a single view of customer information, leading to more personalized banking products and services for consumers.

“The quality of the resources available and the level of focus have been exceptional. IBM has assembled a highly skilled team based upon our specific needs and together we’re working to reach a common set of objectives,” said Charles Linberg, chief technology officer, ACI Worldwide. “The IBM Banking Center of Excellence has provided exactly what we needed, when we needed it.”

At the core of the BCOE is IBM System z mainframe technology with world-class availability, security, and resiliency banks require in today’s on demand financial services environment. The BCOE favors a progressive renovation approach in which upgrades are performed in a phased manner versus a rip and replace strategy, reducing the risks associated with core systems and back office transitions. Clients can also take advantage of business and technology design, vendor and package selection, modeling, proof of concepts and benchmark testing, deployment and system migration.

“By integrating and renovating legacy software with Service Oriented Architectures and performance boosting expertise, our labs can help clients get the most out of their IT investments and better meet the needs of their customers,” said Steve Mills, Senior Vice President of IBM Software Group. “Back office transformation is about change of mission critical processes which carry risk and complexity. Banks can now accelerate this transformation and quickly reap the business benefits that an agile, secure and efficient platform provides, including lower operating costs and an environment that supports organic growth initiatives.”

“The center is staffed by the top professionals from all over the world, across relevant technical and financial areas of expertise, that have come together in one team to help solve the most complex business and technology issues banks face today,” said Jim Stallings, general manager of IBM’s System z mainframe division. “Now clients can leverage this world class resource to realize the superior value of System z in core banking transformations.”

For independent software firms working with IBM and financial clients, the center will produce both tactical and strategic benefits. Tactically, ISVs will see shorter sales cycles, since the vendors’ pre-staged applications can be benchmarked and evaluated quickly. Strategically, ISVs will benefit from participating in IBM’s back office reference architecture and the ability to interoperate with other banking applications.