IBM Banking SolutionsCore Systems Transformation Solutions

Financial Services Industry Solutions

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Introduction

An on demand bank is “an enterprise whose business

processes–integrated end-to-end across the company and

with key partners, suppliers and customers–can respond

with flexibility and speed to virtually any customer demand,

market opportunity or external threat.” IBM’s industry

experience and expertise as well as proven offerings and

solutions help banks accelerate their progress to becoming

on demand enterprises.

Many aspects of On Demand Business are common to all

industries. However, because each industry has unique

requirements, IBM has leveraged considerable experience

and capabilities to tailor On Demand Business by industry.

For banking, this includes providing specific capabilities for

areas such as bank branches or connections with payment

networks to manage cryptographic keys in banking networks.

Core Systems Transformation Solutions

Support changing regulatory requirements with a flexible

infrastructure. Integrate and streamline core processes.

Develop and launch new products quickly. Be more profitable

and ready to grow.

Today’s banks must operate in a new business environment

with greater demands from regulators as well as their

customers. Complex, highly interdependent products and

relationships have emerged with the need for absolute

real-time processing and advanced risk management.

The ever-increasing costs of maintaining present banking

systems, however, hinders investment in these new

capabilities which could ultimately save money, enhance

revenues and eliminate non-compliance with Governmental

agencies. What is needed is an infrastructure mind shift: from

individual infrastructures, which support the inter operation

of each application and channel, towards a common

infrastructure, which supports all inter operation for all

applications and channels in order to enable product-based

applications to participate in customer-centric processes.

IBM solutions for Core Systems Transformation help banks

deliver complex, highly interdependent customer-centric

products and relationships with the appropriate management

of internal and regulatory risk. They leverage an on demand

model to optimise cost structures by focusing on business

and technology architecture through the integration of

processes with technology. These solutions also ensure

that banking products can be developed and delivered

competitively, with a customer-centric view. IBM offers

process re engineering and integration, migration and

conversion services, organizational change management,

infrastructure integration and knowledge in the buy/build

selection decision.

As the leading provider of core systems, IBM has a proven

reputation. Banks can rely on comprehensive application

and channel inter operation. We help ensure the cost-efficient

operation and management of basic banking products

that depend on the flawless generation of critical data from

different areas of an institution. The results are stability in legal

compliance and internal control.

IBM’s approach to successful Core Systems Transformation

involves a strategic assessment followed by a phased or

module replacement or a total system replacement.

Strategic Assessment

The IBM Strategic Assessment offering was designed to

minimize corporate costs while improving overall quality.

It addresses time-to-market, post-merger/acquisition

issues and mission/strategy changes. Banks can reduce

the complexity of their legacy systems and align business

strategy with IT and operations investments. IBM consultants

know how to implement recommendations on the most

sophisticated business models. Our approach offers a new

business perspective by defining the economic value of

business components and assessing their organizational

impact. The Strategic Assessment offering provides

business-driven objectives analysis, identifies business

components, aligns IT and operations support to these

components, and assesses architecture, taking advantage

of IBM component-based model methodology, on demand

strategies, Information Framework models and assets.

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Module Replacement

The IBM Module Replacement offering provides a

conservative approach, adding function module by module

rather than implementing a full system replacement. IBM

has top-to-bottom capabilities in the market, including world

leading alliances and project financing, and can provide

application module independence. This offering helps

localize requirements, integrate processes and provide

migration and conversion. It also offers organizational change

management and expertise in making the appropriate buy/

build or selection decision.

Total System Replacement

IBM’s Total System Replacement is offered to financial

institutions that need to take a holistic approach to change,

as their aging systems no longer provide the functionality

they require to compete. This offering provides end-to-end

capabilities including consulting and design services,

implementation and migration, ISV applications and financing.

The result is a fully integrated system that has the ability

to move faster and open up new streams of business that

promote growth, cost savings, and generate more revenue.

IBM Payments Solutions can help banks differentiate themselves by offering unique services, by enabling automated intelligent routing of payments, and by dynamically controlling the flow of payments.

Payments Solutions

Streamline payments across the operational environment

including end customers, both retail and wholesale, to banks,

counter parties, and intermediaries. Seamless integrate

processes with external clearing agencies.

Many banks are also interested in upgrading existing systems

to leverage improvements in technology that will result in

reduced costs and greater resilience. In the Check space it

may include Image Gateways and Image Exchange.

Payment systems are the life blood of the financial services

industry and must be resilient, operating 24x7x365

especially in the retail payments area. The systems that

manage and transmit payments must be resistant to all

forms of interruption and pressure. This is why optimising

processes is key to achieving efficiency, eliminating

duplication, and repairing and managing transactions

effectively. Overall payment efficiency (operational and IT)

is determined not just by the straight-through-processing

(STP) rate but by how well non-STP transactions are

handled along with the defect rate.

Banks can achieve differentiation in their payments business

by offering unique services to their clients, by enabling

automated intelligent routing of payments, and by offering

their customers the ability to dynamically control this flow.

Payments can be treated by various parameters, such as

the originator, value, payee, time of day, or the needs of the

customer. IBM offers integrated, fraud-resistent, Web-enabled

solutions with existing systems while at the same time

feeding payment instructions into established clearance and

settlement systems.

Cheque

IBM Check offerings include high-speed capture and proof

solutions for the initial capture of checks as well as check

images (Day 1 offering) and exceptions processing including

archiving and image exchange (Day 2). To help banks take

advantage of regulations on returning hard copies of checks

in some markets, IBM provides a solution that reduces

unit costs by streamlining processes with state-of-the-art

technology and a proven infrastructure. IBM’s solutions

recognize that existing legacy systems cannot be disrupted.

They are flexible, with the ability to exploit image exchange

with a Gateway. IBM’s leadership position on image quality

provides ready access to third-party providers running on

flexible IBM infrastructures. IBM reliable check solutions can

help cut labour costs and fraud, mitigate conversion risks,

and leverage existing investments.

To help banks prepare for government regulations on returning hard copies of checks, IBM has designed a solution that reduces unit costs by streamlining processes with state-of-the-art technology and a proven infrastructure.

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© 2005 IBM Australia Limited ABN 79 000 024 733 All Rights reserved

IBM Australia 55 Coonara Avenue West Pennant Hills NSW 2125

Printed in Australia 08/05

IBM, the IBM logo, and the On Demand Business logo are registered trademarks or trademarks of International Business Machines Corporation in the United States and/or other countries. Other company, product and service names may be trademarks or service marks of others. References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. GL_6925

Do you see a potential benefit to your company?

To find out more, call 132 426 to speak with an

IBM Sales Representative or visit

ibm.com/au/banking

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