© 2004 ibm corporation 1 ® ibm software group © 2004 ibm corporation banking on demand - business...

© 2004 IBM Corporation1

®

IBM Software Group

© 2004 IBM Corporation

Banking on Demand - Business Integration in the Financial Services Industry

Markus HoubenIBM Software GroupCentral Eastern Europe, Middle East Africa

Bucharest, Oct 27, 2004


Agenda

Market Trends and Challenges

IBM Business Integration Capabilities and Qualities

Why IBM ?


Market Trends and Challenges


CIO

42% of the almost 500 IT executives polled said their systems were more complex than necessary… and maintaining and managing that excess complexity cost them an average of 29% of their IT budgets.— CIO Insight, 02/2003

　　

CFOCompanies that linked business processes with trading partners show 70% higher profitability than those that do not. 　— Business Advisor Zone, 12/2/2002

Today’s Challenges

CEO

New technology alone won’t boost productivity. Productivity gains come from managerial innovation… Companies generate innovations, in fat years or lean, by deploying new technology along with improved processes and capabilities. —McKinsey & Company, Volume 2 - 2003


Becoming an On Demand Business

TechnologyInfrastructure

BusinessDesign

Bus

ines

s P

roce

sses

Innovativebusiness designs that sharpen focusand accelerate growth

Integrated, end-to-end business processes that

are built to change

An IT operating environment optimized for flexibility and

resilience

“An on demand business is an enterprise whose business processes —

integrated end-to-end across the company and with key partners, suppliers

and customers — can respond with speed to any customer demand, market

opportunity or external threat.”


The Banking IndustryBusiness Challenges Exist Across All ProcessesInability to introduce new products in response to market needs and enhance customer service

Declining margins associated with costly, repetitive application function and inability to differentiate customer service

Inability to present consistent functions and service at point of customer contact; aging branch infrastructure

Lack of consolidated risk & compliance data and ineffective review processes

Inability to execute effective, value-based marketing campaigns across all channels

Banking Industry Processes

Processing Distribution InsightRisk

ManagementProduct Dev’t


Execution has been the issue with most Strategies, with horizontal integration being a major inhibitor.

The Plan: Seamlessly integrated operations, product development and delivery capabilities, cost effectively serving discrete customer segments.

The Reality: Disjointed operations, product development, and delivery resulting in hit-or-miss efforts to serve target clients. Overlapping capabilities in the product silos drive an inefficient cost structure.

Product SpecificDelivery

Marketing Sales& Distribution

Operations

SharedFacilities

ProductManufacture

ProductSilo 1

ProductSilo 1

ProductSilo 2

ProductSilo 2

ProductSilo 3

ProductSilo 3

Sub-PrimeSegment

Sub-PrimeSegment

Mass RetailSegment

Mass RetailSegment

Mass AffluentSegment


Wealth MgmtSegment

Wealth MgmtSegment

Ultra HighNet WorthSegment

Ultra HighNet WorthSegmentProduct Specific

Delivery

Marketing Sales& Distribution

Operations

SharedFacilities

ProductManufacture

ProductSilo 1

ProductSilo 1

ProductSilo 2

ProductSilo 2

ProductSilo 3

ProductSilo 3

Sub-PrimeSegment

Sub-PrimeSegment

Mass RetailSegment

Mass RetailSegment



Wealth MgmtSegment

Wealth MgmtSegment



"According to Gartner studies, 35% of the IT budget is spent after acquisition of a new technology in configuration and integration an existing IT environment--before any value is derived from the technology."


Scope of Integration:

The Efficient and Flexible

Combination of

Resources to Optimize

Operations Across and

Beyond the Enterprise


IBM Business IntegrationCapabilities and Qualities


Business Integration Capabilities from IBM

Model business functions and processes

Transform applications, processes and data

Integrate islands of applications, processes and information

Interact with resources anytime and anywhere

Manage performance against business objectives

Accelerate implementation of intelligent processes


Business Challenge

Solution

Technology Benefits: Adaptable and scalable global IT

process 20% IT cost savings

Business Benefits: Near elimination of failed trades 99% reconciliation with custodians 20% reduction in administrative

costs across the organization Average number of pending trades

reduced from 1,700 to 100

Credit Lyonnais implemented Straight-Through Processing and cut costs 20%

A robust Straight Through Processing solution based on IBM WebSphere Business Integration

Streamline a matrix of globally distributed trading systems and increase the efficiency and effectiveness of equity ticket processing to improve market responsiveness

“We literally transformed our organization from end to end into a more professional banking organization that is on the cutting edge of financial services.”

Dominique Ioos, Head of Operations, Equity Products, Credit Lyonnais


Business Benefits New workflow streamlined

loan processes, reduced administrative costs and shortening approval cycles

Ability to respond to customers in realtime--and to share and distribute information among employees and outside sources--has increased earnings

Business Challenge To more efficiently process credit

applications, Fortis needed real-time access to external information resources as well as seamless integration among branch offices

Due to the introduction of a new law, the bank had to respond quickly to a change in the business rules for processing credit applications

Solution Fortis built an information exchange

solution to interact with outside agencies and streamline procedures for processing customer loans

WebSphere Business Integration application integration capabilities link islands of processing and connect customers with the bank

FortisCore Systems Transformation


Benefits:

• Ease of integration with their customers, reducing new customer setup from 18 to 4 weeks

• IBM showed a how to achieve a 38.5% decease in problem resolution costs – from $58 per transaction to $36

• Allows reuse of current systems functionality

Business Challenge: Reduce cost of payments processing and

increase ability to respond to customer needs

Transform ABN payments & EDI infrastructure to support wholesale clients’ B2B transactions

Allow ABN wholesale clients to directly interface with ABN & integrate their payments activities

Solution: This IBM Wholesale Payments solution

includes a capability for ABN to communicate more directly and flexibly with customers. This capability implements a link from existing mainframe applications directly to ABN client (B2B) systems.

The solution also provides a reliable and highly scalable messaging infrastructure that enables ABN Amro to exploit current network technology investments

ABN AMRO Teams with IBM to Transform Payments Processing


HVB Group: STP; integrated front, middle and back-office;Project pay-back in 12 months

B r o k e r sB r o k e r s C o n c e n t r a t o r sC o n c e n t r a t o r s

M a t c h in gU t i l i t i e s

M a t c h in gU t i l i t i e sE C N sE C N s C u s t o d ia n sC u s t o d ia n sM a r k e t D a t a

P r o v id e r s

M a r k e t D a t aP r o v id e r s

R is kM a n a g e m e n t

R is kM a n a g e m e n tC o m p l ia n c eC o m p l ia n c e

P e r f o r m a n c eM e a s u r e m e n t

P e r f o r m a n c eM e a s u r e m e n t

A n a ly t i c sA n a ly t i c s

T r a d eM a n a g e m e n t

T r a d eM a n a g e m e n t

P o r t f o l i oM a n a g e m e n t

P o r t f o l i oM a n a g e m e n t

I n v e s t m e n tA c c o u n t in g

I n v e s t m e n tA c c o u n t in g

D a t a W a r e h o u s e

D a t a W a r e h o u s e

C l i e n t R e p o r t in g

C l i e n t R e p o r t in g

R e g u la t o r yR e p o r t in g

R e g u la t o r yR e p o r t in g

M a n a g e m e n tR e p o r t in g

M a n a g e m e n tR e p o r t in g

E x t e r n a lI n t e r n a l

E n t e r p r i s e A p p l i c a t io n I n t e g r a t io n

B u s in e s s P r o c e s sM a n a g e m e n t

I n d u s t r y S t a n d a r d s

I n f r a s t r u c t u r e

S e r v ic e s

A p p l i c a t io nI n t e g r a t io n

O p e n T r a n s p o r t

R e c o n c i l i a t io n /E x c e p t io n H a n d l in g





S e r v ic e s








S e r v ic e s








S e r v ic e s



R e c o n c i l i a t io n /E x c e p t io n H a n d l in gShared Services

ApplicationProgramming Tools

Platform & Network Infrastructure

ApplicationServer

Data Model

Enterprise DataManagement

Accounting Rules EngineIntegration Services

Reliable Message Bus

ProcessManagement

Message Broker

AdaptersSecurities Data Bases

Security & Systems Management Infrastructure

Process Model

DB2

MQAO

WebSphere

VisualAge

Tivoli

MQSeries

MQSIMQWF

Shared Services



ApplicationServer

Data Model




ProcessManagement

Message Broker



Process Model

Shared Services



ApplicationServer

Data Model




ProcessManagement

Message Broker



Process Model

DB2

MQAO

WebSphere

VisualAge

Tivoli

MQSeries

MQSIMQWF

Connect Monitor Model ManageIntegrate


Service Oriented Architecture (SOA) enablementSimple, integrated development

Common tools platform Re-use and unification of assets

Secure and scalable deployment Common and flexible

deployment environment Flexible management and

security infrastructure

Standards leadership Interoperability Investment protection Freedom of choice

Proven experience Augmented with best practices Improved time to value Risk mitigation

Business Integration Qualities from IBM


Enterprise Service Bus

Services to Solve Complex Business Requirements

Monitoring Services

ProcessServices

Application Services

Information Services

Model, design, development, test tools

Common Runtime Infrastructure

Community Integration Services

User Interaction Services

IBM Business Integration Reference Architecture

Enterprise applications Enterprise data

Data Access ServicesApplication Access Services


Enterprise Service Bus

Enterprise applications Enterprise data

Data Access ServicesApplication Access Services

Services to Solve Complex Business Requirements

Monitoring Services

ProcessServices

Application Services

Information Services

Model, design, development, test tools

Common Runtime Infrastructure

Community Integration Services

User Interaction Services

IBM Business Integration Reference Architecture

WebSphere BI Modeler WebSphere Studio

IBM Information Integrator

WebSphere BI Server

WebSphere BIServer Foundation

WebSphere Portal Server

WebSphere BI Connect

WebSphere Application Server

WBI Adapters IBM Information Integrator ClassicHATS

WBI Monitor

Web Services Gateway WBI Event/Message BrokerWebSphere MQ


Analyst Architect Developer TesterVisually

construct, transform,integrate

and generate code

Design, create,

and execute tests

Model, simulate, assemble,

and monitor business

processes

Modelapplications

and data

Follow a common process Track project status Manage requirements

Manage change and assets

Manage quality

Project Manager

DeployerProvision,

configure, tune and

troubleshoot applications

Integrated Development Platform

Development Platform


IBM Open Standards Leadership

1980s -1990s• Java and ebXML

• ISO STEP• OMG UML and XML

• OpenGL• SQL• AIAG• IEEE• VRML• ANSI• RosettaNet

2000 / 2001

• Web Services

and Tools

• Eclipse to Open

• UDDI

• SOAP

• W3C XML

• SOAP4J to

Open

First integrated private UDDI directory

2002

• Web Services

and Security

• BPEL

• WS-TX

• WS-TC

Over 160 business integration technology

patents

2003

• Web Services

Interoperability

• WSBPEL

• Common Base

Events

• OASIS WSDM

• OASIS WS-

Security

• WS-I Basic Profile

First Web Services Gateway

2004• Web Services

Management

• OASIS WS-Notification

• Cloudscape to Open

• 1,000+ XML developers and 1,500+ on Linux

• 200+ products for Linux

Open


Why IBM ?


Financial Services Solutions

IBM Middleware Solutions

for BankingBranch TransformationChannel EmpowermentCore Systems TransformationRisk and Compliance FoundationWholesale Payments Processing


for BankingBranch TransformationChannel EmpowermentCore Systems TransformationRisk and Compliance FoundationWholesale Payments Processing


for InsuranceClaims ManagementUnderwritingPolicy ManagementChannel Distribution IntegrationCustomer Insight


for InsuranceClaims ManagementUnderwritingPolicy ManagementChannel Distribution IntegrationCustomer Insight


for Financial MarketsFront Office InsightTrade & Order ManagementFinancial Information InterchangePost Execution IntegrationRisk and Compliance


for Financial MarketsFront Office InsightTrade & Order ManagementFinancial Information InterchangePost Execution IntegrationRisk and Compliance


IBM: Helping Customers SucceedA History of Accomplishments in Financial Services

95% of the largest 500 banks in the world run IBM eServer

90% of all bank customer data is stored with IBM database and data management software

48 of the top 50 commercial and savings banks in the world use WebSphere software

96 of the top 100 financial institutions in the world use Tivoli software


IBM Commitment to Integration

Nobody invests more $1 billion annual investment in development $5 billion investment in technology

acquisition, including: Modeling Process Integration Software Development

Over 7,000 developers

Continued success 62,000 WebSphere customers 10,000 customer sites rely on WebSphere MQ 2,000 customers rely on WebSphere

Business Integration 2,000+ customers reply on WebSphere Portal since

year 2000 introduction

IBM has top market share in 6 middleware markets

—Gartner, August 2003IBM has widened its lead as the leading and most question-free vendor in commerce servers —Giga, August 2003

Best Java Messaging Tool – IBM WebSphere MQ

—Java Pro Readers’ 2003 Choice Award

Product of the Year – WebSphere Business Integration Server v4.2

—Business Integration Journal Awards, 2004

Market-leading Business Integration Environment


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© 2004 ibm corporation 1 ® ibm software group © 2004 ibm corporation banking on demand - business...

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