© 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 !
3 ©2010 IBM Corporation
• 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.
4 ©2010 IBM Corporation
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
5 ©2010 IBM Corporation
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
6 ©2010 IBM Corporation
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
7 ©2010 IBM Corporation
Framework projects in four domains provide the capabilities to address banking pain points
Integrated RiskManagement
Customer
Care and Insight
IntegrationOptimization
AnalyticsCollaboration
SecurityResiliency
Core Banking Transformation
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
IBM Banking Industry Framework
8 ©2010 IBM Corporation
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
9 ©2010 IBM Corporation
Start simplifying and realizing benefits with a framework project
… select from 20 project areas across 4 framework domains
Integrated RiskManagement
Customer
Care and Insight
IntegrationOptimization
AnalyticsCollaboration
SecurityResiliency
Core Banking Transformation
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
IBM Banking Industry Framework
10 ©2010 IBM Corporation
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
11 ©2010 IBM Corporation
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
12 ©2010 IBM Corporation
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
13 ©2010 IBM Corporation
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
Framework project partners
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
Framework technology capabilities
MMMEuroDebit MTSGlobal Payplus Open Payments Framework
Payments and Securities Project ExampleSEPA Compliance
14 ©2010 IBM Corporation
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
15 ©2010 IBM Corporation
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
Framework project partners
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
Framework technology capabilities
Financial Risk – Risk Insight and Control Project
16 ©2010 IBM Corporation
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
17 ©2010 IBM Corporation
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
18 ©2010 IBM Corporation
Accelerating Solutions for Smarter Banks
Thank You