Unlocking the Business Valueof Information
Banking and Financial Markets
IBM INFORMATION ON DEMAND COMES TO YOU
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Banking industry direction and challenges are dynamic
Trend Challenge
Market Disruptions
Manage cost without losing
competitiveness
Differentiate Product
Commoditization
Risk and Compliance
Optimize risk and compliance
processes
Empowered Customer
Offer right mix of products and
services
Consolidation & Globalization
Achieve value and synergies from mergers
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Application Agenda
Faster Processing, Reduced Costs
Competitive Advantage
Financial Management
Loan Processing
Call Center Operations
Information Agenda
Financial Risk Insight
Lending Profitability
Customer Profitability
New Investments Increasingly Focus on OptimizationShift from Application Agenda to Information Agenda
Spending on Business Optimization Growing 2X Faster than Automation
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Dramatic Shifts in the Industry Landscape are Compelling Bankers to Innovate
Macro• Changing economic
conditions
• Globalization
• Risk Management
Consumer• Empowerment
• Changing
Preferences
Emerging Technology• Technology Innovation
• Pervasive Connectivity
Competitive• Consolidation
• New Business Models
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Improve Customer Care and Insight
Manage Governance, Risk and Compliance
Increase Operational Efficiency
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Effective use of information is key for bankers to compete
Improve Customer Care and Insight
Manage Governance, Risk and Compliance
Increase Operational Efficiency
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Key Drivers of Growth & Profitability are dependent upon effective use of trusted information
Business Value Derived
• Revenue Growth
• Deeper Relationships
• Customer Retention
• Profitability
• Proactive risk mitigation
• Risk adjusted decisions
• Enterprise assessment
• Reporting accuracy
• Ease of Information Access
• Minimal data handling
• Analytics to lower volumes
• Fact based performance metrics
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The Untapped Potential of Banking Information
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Moving from Current State . . . …to Next Generation
• Branch Operations
• Lending
• ERP & Financials
• Marketing Campaigns
• Branch Profitability – Manage profitability
throughout the branch network down to
customer and product level
• Straight Through, Risk-Based Processing –
Improved profitability through process
optimization with risk-adjusted decision making
• Financial Risk Insight – Improved financial risk
insight through better business visibility
• Personalized Multi-Channel Event Driven
Campaigns – Deliver real time customer insight
across channels and business units based on
customer activity
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Automation Optimization
Making existing information valuable
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Key Challenge is Unlocking the Business Value of Information
1AIIM 2008 Survey2Accenture 2007 Managers Survey
52% of users
don’t have confidence
in their information1
42% of managers
use wrong information
at least once a week2
59% of managers
missinformation
they should have used2
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“…Information is growing like crazy,
we need to get control of it…”
• Reduce cost of deployment andC management• Ensure information accessibility, retention and compliance
Are you effectively managing information over its lifetime?
Supporting Capabilities Needed
� Storage Management Solutions
� Systems Management & Security
Information Management Technologies Needed
� Database Management
� Integrated Data Management & Archiving
Banking Trends / Drivers� Increasing Regulatory Requirements
� Consumer demanding more history
� M & A duplication without rationalization
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“…We need a better way to incorporate content into our business processes and maintain it for compliance purposes…”
• Transform paper-based processes• Retain information to address compliance requirements
Are you using content effectively to optimize your operational and compliance processes?
Information Management Technologies Needed� Enterprise Content Management� Content Driven Process Optimization� Records Management & Compliance� Content Classification & Search
Supporting Capabilities Needed� SOA Infrastructure� Transaction Processing� Portals & Collaboration Tools� Application Development Tools
Banking Trends / Drivers� Offer management decisions
� Credit and Fraud risk
� Customer Experience
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“…Information about our clients and products is fragmented and inconsistent across
channels and applications…”
• Integrate, reconcile and transform data and content, regardless of type or complexity
• Deliver trusted information in context
Can you establish, govern and deliver accurate, trusted information?
Information Management Technologies Needed� Information Integration� Data Warehousing� Master Data Management
Supporting Capabilities Needed
� SOA Infrastructure
� Storage Management Solutions
� Industry Specific Data and Process Models
Banking Trends / Drivers� Performance Reporting and Compliance� Credit and Fraud risk� Customer Experience and profitability
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“…How am I supposed to get ahead of the competition? I don’t have a good understanding of
where I am, or what I should do differently…”
• Know how you are doing• Understand why• Determine what you should be doing next
Can you effectively plan, understand and optimize business performance?
Information Management Technologies Needed
� Scorecards & Dashboards
� Reporting & Analytics
� Planning, Budgeting & Forecasting
Supporting Capabilities Needed
� Portals & Collaboration Tools
� Business Process Management
Banking Trends / Drivers� Performance Reporting and Profitability� Risk scorecards and Portfolio Management� Customer Relationships
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Manage information over
its lifetime
Information On DemandUnlocking the Business Value of Information forCompetitive Advantage
Better Business
Outcomes
Customer & Product
Profitability
Workforce
OptimizationDynamic
Supply Chain Multi-Channel
Marketing
Financial
Risk Insight
Business Optimization
Establish, govern, and deliver
trusted information
Plan, understand and optimize
business performance
End-to-EndCapabilities
Optimize content-based
operational & compliance
processesOther
InformationSources
Flexible Architecture for Leveraging Existing Investments
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3
4
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Common Landscape in Banking EnvironmentsCreates an Information Gap with Strategic Challenges
Business Units
Wealth Management
Core Systems
Channels
Relationship Managers/
Agents
ATMs
Call Centers
Internet
Branches
DB App
DB
App
Core Systems
DW
DBCRM
App
Retail Banking
Corporate Banking
DB
CRM
App
AppDB
DW
Core SystemsCRM DB App
Capital Markets
Insurance
CIF
PartnersDB
CRM AppDB
App DW
DBCore
Systems
Data Systems
Core Systems
ERP
Customer
� Inconsistent View of Customer
� Silos of Information
� Information Locked in Repositories
� Inconsistent Data
� No Single Version of the Truth
� Poor Channel Communication
DB App
DB
DB
AppCRM
ODS
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Maturity ofInformation Use
Bridging the Gap is a Necessity Driving Value with Information a Strategic Asset
Information to Manage the
Business
Basic Information Interaction
BusinessValue
Data to Run the Business
Focus on DataAnd Reporting
Adaptive Business
PerformanceInformation as a
Competitive DifferentiatorReal-time Single
View of the Truth
Information to Enable
InnovationInformation in Context
Flexible Information Architecture
Desired StateFlexibility & Speed
Current StateInformation Intensive
Projects
33%still here*
59%currently focused here*
* Based on Gartner 2007 Survey
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“…How do I deliver on an information strategy that aligns with my business needs with a roadmap that
provides returns along the way?”
Have you made information a strategic asset?
• Establish a business based information strategy
• Get started quickly, minimize risk and ensure long term success
• Leverage and extend existing IT investments
Information Management Software & Accelerators� Foundational Tools� Information Accelerators� Competency Centers� Information Agenda Guides and Workshops
Supporting Capabilities� Strategy� Roadmap� Information Infrastructure� Information Governance
Banking Trends / Drivers
� New Business model – LOB’s, contraction, Specialization
� Significant cost pressure
� Regulatory changes
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Sustained
competitive
advantage
Desired StateFlexibility& Speed
Current StateInformation
Intensive Projects
Highly
justified
projects
Information Based Enterprise
…transform information into a trusted
strategic asset that can be rapidly
leveraged across applications,
processes and decisions for
sustained competitive advantage…
…transform information into a trusted
strategic asset that can be rapidly
leveraged across applications,
processes and decisions for
sustained competitive advantage…
…an enterprise with an
Information agenda
So, What’s Next?Creating an Information Agenda
The transformation starts with existing opportunities in the context of strategic assets and capabilities
The transformation starts with existing opportunities in the context of strategic assets and capabilities
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Information AgendaGuides & Workshops
Industry tailored sessions to guide future state design,
identification of key information requirements and gap analysis
InformationAccelerators
Industry specific assetsto speed deployment
FoundationalTools
Software to help you convertyour information into
a trusted strategic asset
Information On DemandCompetency Centers
Services to help you build information centers
of excellence
It Takes More Than Just Technology
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Creating a vision to guide decisions & help
the organization determine how to best
support business goals
Strategy
Identifying the technology
components & capabilities to
establish a common information framework
Information Infrastructure
Establishing a plan for executing discrete
projects to realize short and
long-term returns on investment
Roadmap
Implementing policies & practices for managing,
using, improving & protecting
organizational information
Information Governance
Best practice “how-to” for unlocking the business value of information
An information agenda-the path to success
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Strategy: The Vision and Link toBusiness Strategy
Collaboration between the CIO and line-of-business managers is a critical success factor for any organization's information agenda.
IODArchitecture, Roadmap & ValueCase
Business Capabilities
Vision and Value
� Establishes guiding principles
� Provides an end-to-end vision for all components
� Aligns information needs with business strategy and operating framework
� Is created by stakeholders from across the organization
� Determines where to focus for optimal performance impact
Strategy
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Strategic Imperatives
The key focus areas for
a specific industry that
are critical to improving
overall business
performance
Core Management Processes
The underlying processes that
are prevalent across all areas of
the company in every industry
and must be managed for
improved business performance
Business Objectives
The processes and
activities that can be
optimized through
more effective use of
information in support
of the strategic
imperatives
Led By The Banking Business Optimization Map
Information Agenda Guide for Banking
Identifying Business Objectives & IT Projects to Support Strategic Imperatives
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The Banking Optimization Map Drives the Information Agenda
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Identify industry specific initiatives and information centric objectives.
Establish Information Management technology requirements.
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Card Business Function “Heat Map”
Plan/Direct
Execute
Control
Financial
Management
Business
& Resource
Admin
Business
Portfolio
Management
Customer Sales
& Servicing
New
Business
Development
Product
Delivery
Distribution
Services
Operational
Services
Treasury
AccountingGeneralLedger
FinancialsConsolidation
FacilitiesOperation &Maintenance
SystemsDevelopment &Operations
ProductionAssurance(Help Desk)
FixedAsset Register
BusinessUnit
Administration
PersonnelManagement
ConsolidatedBook/PositionMaintenance
Securitization/Syndication
Inter-bankAccount
Management
Sales /Cross Sell
TransactionCaptureServices
Service Dialogue& Routing
ProductDevelopment
MarketResearch
CampaignExecution
ProductDirectory
Marketing and Advertising
Deposits -SpecificProcessing
Card-specificProcessing
Lending specific Processing
Contact/EventHistory
CollateralHandling
CustomerProfile
RelationshipManagement
Customer Decisioning
RewardsAdministration
InventoryManagement
CashInventory
MarketInformation Correspondence
DocumentManagement& Archive
PaymentManagement & Processing
CustomerAccount
Maintenance
Collections& Recovery
FinancePolicies
Business Unitand ResourcePlanning
BusinessPolicies &Procedures
Asset &Liability Policy& Planning
CustomerSales & Servicing
Planning
SegmentAnalysis &Planning
Market Analysis
ProductOperationsPlanning
CustomerPortfolio &Analysis
CreditPolicy & Planning
ProductServicesPlanning
AccountServicesPlanning
Reconciliations
FinancialControl
Business & SystemsArchitecture
BusinessUnit Tracking
Risk/PortfolioManagement
Case &ExceptionHandling
Sales/Service
Administration
CampaignManagement
ProductPortfolio
Management
ProductOperationsOversight
CustomerBehaviorModeling
Application & Pricing
RelationshipOversight
ProductServicesOversight
Fraud/Abuse
Monitoring
AccountServicesOversight
CampaignPlanning
Product DesignOversight
Product PortfolioPlanning
Commissions
ChannelOperations
Product Deployment Oversight
ML
M
LExternalRelations
M
MAudit & LegalCompliance
M
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M
H
HL
M
H
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H
M
L
M
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M
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L
M
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MM
M
H
M
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ML
Customer
Management
Heat Map: Hot business functions are those which will have the greatest impact on the Strategic plan results
Attribution Key
H- HighM- Medium
L-LowSystem DependencyBusiness Strategy Alignment
“ Hot ” Business Function
“Warm” Business Function
“ Luke Warm” Business Function
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Innovating with Information in Banking
Customer
Security
Storage
AnalysisData
Quality
Access
Governance
Master Data Management
Integration
InformationCapabilities
CapabilitiesBPM
Customer
Analytics
Sales & Channel
Management
Service
Product
Management
Campaign
Management
Marketing
AnalyticsSelf
Service
Core
Analyze Demographics, Channel Usage, Profitability, and Buying Patterns
Perform risk analysis and business performance reporting with accurate trustworthy information
Create Personalized Products and Services with Dynamic Pricing
Perform Segmentation, Personalization, Channel Effectiveness and Propensity to Buy Analysis
Manage multistage, multi-channel campaigns with accurate and timely customer information
Use CC&I to optimize sales and distribution
Leverage real time view of customer relationship and channel integration to provide exceptional service
CustomerLifecycle
Deliver multi-channel, real time client information to self service channels
Improve Data Governance
Business Performance Optimization
Optimize Content
Centric Business Processes
Threat and Fraud
Intelligence
Manage Risk and
Compliance
Customer Care and
Insight
Optimize Back Office
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• Identify the key business areas for focus
• Determine what can be optimized by better leveraging information
• Establish the technology requirements
• Identify the project stepping stones
• Suggest an industry specific implementation roadmap
• Connect to the IOD reference architecture
• Harness our experience from thousands of customers
Information Agenda Industry Guides & WorkshopsSpecific Content for Banking and Financial Markets
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Workshops & GuidesWorkshops & Guides……• Workbook and Roadmap Templates• Information Governance Best Practices• Led by Subject Matter Experts across IBM
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Provides portfolio aggregation views to counter-parties to exceed risk and reporting guidelines. and provide accurate visibility to senior Risk Managers.
Provides enterprise access to customer information in 20 million enterprise documents, with cost savings of $2.3 million in 2 years.
Delivers enterprise view of customers across lines of business and channels empowering front office personnel.
Top 10 Global Investment Bank
Strategic Imperatives
Core
Management
Processes
Business Objectives
Key focus areas for a specific industry that are critical to business performance
Processes and activities that can be optimized through effective use of information
Processes that are core to all industries and must be managed for improved business performance
Identifies Strategic Imperatives & Business Objectives
Top 10 USRetail Bank
Top 10 USRetail Bank
Business Optimization Map for Banking
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Industry Guide for BankingCommon Infrastructure for Enterprise-Wide Business
Optimization
A unified enterprise information infrastructure…
…to unlock the
business value of
information
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Industry Guide and Roadmap for BankingIdentifies Roadmap and Accelerators for Strategic
Imperatives
� Banking Industry
Models (InfoSphere)
� Risk Adjusted
Profitability (Cognos)
� Banking Data
Integration (GBS)
IBM Accelerators for
Customer Care & Insight
Roadmap for
Customer Care & Insight
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A unified information management strategy is key
…to manage data over its lifetime
1. Data management layer…
…to optimize content,
process and compliance
management
2. Enterprise content management layer…
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3. An information integration layer…
…to establish, govern and deliver trusted
information
Each ‘layer’ builds value in information
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…to optimize business
performance
…to optimize business
performance
4. Business intelligence and management layer…
4. Business intelligence and management layer…
Enabling the agility and flexibility necessary
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…to unlock the
business value of
information
A unified enterprise information infrastructure…
The foundation of each information agenda…
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…delivers significant business value…
Cross-channel customer, credit risk, and bank staff performance management from 7 weeks to 7 seconds 80% decrease in
mortgage & commercial credit management processes; fewer write-offs & lower frequency of loan audits
Boosted profitability via $1mm annual savings and 63% reduction in cycle time of correspondent loan processing
Watch-list checks reduced from 12 hours to under 15 minutesenabling use of 40,000 names instead of 2,500. New business revenue stream established in offering transaction monitoring services to other financial institutions
Best practice Basel II information led to bank’s credit rating increase, and reduction in capital adequacy ratio redirecting capital toward profit-generating activities
Information Agenda for Banking
Information Agenda for Banking
Strategic Imperatives
The key focus areas for
a specific industry that
are critical to improving
overall business
performance
Core Management Processes
The underlying processes
that are prevalent across
all areas of the company in
every industry and must be
managed for improved
business performance
Business Objectives
The processes and
activities that can be
optimized through more
effective use of
information in support
of the strategic
imperatives