[ I B M] Ibm Banking Overview Final Version For F T U

© 2010 IBM Corporation

The IBM Banking Industry Framework Accelerating Solutions for Smarter Banks

IBM Banking solutions Framework for FTU – May 7th 2011

Aaron Axworthy Director Financial Services Sector - Vietnam

2 ©2010 IBM Corporation

$1,264 trillionThe value of global assets3 will quadruple by 2025 – calling on a vibrant global financial system to intermediate and manage.

Half the world is unbanked. Just over half of world’s adult population do not use formal financial services to save or borrow.2

2.5 billionGrowth in world GDP1 from 2010 thru 2025 will put the current crisis in context.

5.8% CAGR

1 - Nominal 2 - http://financialaccess.org/sites/default/files/110109%20HalfUnbanked_0.pdf 3 - Assets = deposits, equity and fixed income

Reasons to be optimisticThere is an extraordinary opportunity !


• A global system moves more than $74T of money each day

• A financial supply chain that is massively interconnected and interdependent

• Public and private partnerships are suboptimal cross-border and within borders

• System requires 24/7 continuous flow of information

• Rapid increase in types of data entering financial system from “real economy” digitization

• A criminal element that grows more sophisticated

• In total the system intermediates the needs of billions of people in 190 countries in thousands of languages.

An adaptive system evolving organically

Policy makers

Regulators Supervisors

Financialinstitutions

Compliance

Laws andrules

Surveillance and monitoring

Standards

SoundnessStability

Dramatic forces changing the world’s most complex system.


Commercial banking

Retailbanking

Corporatefinance

Assetmanagement

Custodyand agency

services

Sales andtrading

Payments Processing

Anti-Money Laundering

Compliance Reporting

Trading Systems

General Ledger

Account Opening

Customers

Partners

Regulators

Service Providers

Inflexible, complex operations and silo’d data hinder progress in using data as a strategic asset


IBM provides a comprehensive framework that delivers accelerates solution deployment

The framework provides a banking-specific software platform with…

• Banking extensions and pre-built solution accelerators to speed deployment

• Best practices and business- specific usage patterns to lower risk

• Support for adoption of open and industry standards

• A choice of business applications from IBM business partners

• An approach to align technology with business needs

The framework gives you speed, flexibility and choice in deploying solutions while

reducing cost and risk!

Integrated RiskManagement

Customer

Care and Insight

IntegrationOptimization

AnalyticsCollaboration

SecurityResiliency

Core Banking Transformation

Paymentsand

Securities

IBM Banking Industry Framework


The framework delivers business value

• Simplify your infrastructure, reduce costs, and enable growth through innovation

• Enable integration of information and processes across the bank

• Build an efficient technology roadmap that you can adjust over time based on business needs

• Implement framework projects to address business problems across the enterprise

• Drive a greater return on project investment through asset re-use

• Speed deployment of solutions


Framework projects in four domains provide the capabilities to address banking pain points


Customer

Care and Insight



SecurityResiliency


Paymentsand

Securities

The core banking transformation domain allows you to modernize and renovate the legacy applications that support core banking functions while aligning with the changing needs of the business

The customer care and insight domain helps you build a foundation for creating a single view of the customer and enabling more effective and efficient sales and service

The integrated risk management domain supports taking a holistic approach to managing financial risk, financial crimes, operational and IT risk, and compliance

The payments and securities domain helps you progressively transform your payments operations to become more flexible and efficient



Choose from leading business partner applications for your solutions

…with 35+ IBM business partners in the framework ecosystem

• Proven integration between IBM framework middleware and industry-leading partner applications provides…

- Faster deployment - Easier integration- Lower cost of operations

= validated for solutions that leverage the IBM Banking Industry Framework for payments & securities


Start simplifying and realizing benefits with a framework project

… select from 20 project areas across 4 framework domains


Customer

Care and Insight



SecurityResiliency


Paymentsand

Securities

IT Foundation TransformationCore Banking Process AgilityCore Banking Application Modernization

SEPA ComplianceCorporate ServicesSWIFTNet ModernizationRetail PaymentsPayments Process EfficiencyDigital Payments Conversion

Financial RiskFinancial Crimes

Operational and IT RiskGovernance and Compliance

Customer Insight OptimizationCustomer Information

OptimizationMulti-Channel Transformation

Sales Process OptimizationService Process Optimization

Compliance Process OptimizationMarketing Process Optimization



Core Banking TransformationTransforming back office legacy systems

• As banks seek to grow revenue and improve operational efficiency through product innovation, globalization, and M&A activities, legacy back office systems often become inhibitors

• Mismatch between the horizontal business processes and the vertical application silos leads to ever-increasing IT integration complexity

• Heavily customized and inflexible legacy systems make it hard and expensive to support regulatory changes


Core Banking Transformation Project Example

Example

Build new business service components & integrate with legacy, leveraging IBM Component Business modeling approach

Core Banking Process Agility – Bundled Offerings Project

Needs to sell customized product and service bundles and manage the end-to-end lifecycle of the resulting contracts while maintaining legacy systems as-is.

9 to 18 month project Deliver revenue growth through SOA while leveraging legacy

Client issue

Benefits

Solution

Framework project partners

Core banking workbench for model and business-driven development Information FrameWork (IFW) data models Business rules management Process choreography Enterprise service bus Master data management

Framework technology capabilities


Payments and SecuritiesBanks need flexible and efficient operations

• Commoditization of payments services resulting in shrinking returns

• Need to specialize and innovate to drive revenue growth

• Market harmonization across the global payments infrastructure drives need for integration with third parties

• Increased merger, acquisition and disposal activity has resulted in redundant operations

• Sophisticated fraud and anti-money laundering activity drives need for transparency and security


Financial institutions are required to comply with Single Euro Payments Area mandates

2 to 9 month projects Standardization of processes, process efficiency, reduced cost and risk

3 Deploy an ISV-provided payments application

1 Build compliance into existing payments applications

2 Renovate existing payments applications

Client issue

Benefits

Solution options


Banking process and data models Process choreography Application connectivity Message transformation to SEPA standards XML message management to SEPA standards Accelerators for building a custom enterprise payments hub


MMMEuroDebit MTSGlobal Payplus Open Payments Framework

Payments and Securities Project ExampleSEPA Compliance


Integrated Risk ManagementHolistically manage risk across the enterprise

Banks need to:

• Understand market and credit risk exposure across multiple silos

• Secure all transactions and forms of interaction

• Proactively prevent increasingly sophisticated internal and external prohibited activities

• Effectively manage detected events

• Proactively manage internal and external potential risks

• Understand and manage increasingly complex compliance requirements at optimal cost


Integrated Risk Management Project Example

Lack of trusted and integrated risk information makes it difficult to understand actual risk exposures facing the bank and also results in inaccurate reporting of exposures to regulatory bodies and executive management

More timely and better decision-makingImproved accessibility to risk information across the enterpriseReduced costs

Consolidate data to create a trusted and accessible source of information Apply analytics and business intelligence to generate enterprise risk reporting Apply portal and collaboration technologies to give end users easy access to information

Client issue

Benefits

Solution


Data warehousing and master data managementCommon banking data models Enterprise dashboards, scorecards, and reporting templatesAlerts based on business eventsAccess via web, email, mobileEnhanced visualization capabilities from IBM Research


Financial Risk – Risk Insight and Control Project


Customer Care and Insight Optimizing the customer experience

Consumers…

• Demand innovative and more customized products and services

• Want a consistently high quality customer experience across all touch points

Banks…

• Must be able to identify their most profitable customer relationships

• Need an enterprise view of customer relationships to optimize the customer experience

• Need to balance managing cost, risk, security and compliance with meeting customer needs


Customer Care and Insight Project Example

Customer Information Optimization – Customer Data Integration Project

Customer data is duplicated and spread across multiple silo’d databases, leading to an inconsistent experience for customers dealing with the bank

Projects can be implemented in as little as 6 months Improved customer satisfaction and retention, reduced maintenance costs

Client issue

Benefits

Banking data warehouse models Data warehousing Master data management tools Reporting tools Process choreography Implementation expertise

Framework capabilities

Build an integrated data warehouse to create a consolidated customer profile and enable customer-centric processingSolution


Accelerating Solutions for Smarter Banks

Thank You

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