IBM Launches Banking Centers of Excellency

By Nancy Feig

On Tuesday, we here at the Bank Systems & Technology headquarters were treated to visit from June Felix, IBM's general manager of banking solutions. Felix was here to talk about IBM's latest endeavor, three new "Banking Centers of Excellence," which will hereafter be referred to as BCOEs.These new centers, in Silicon Valley, Calif., Poughkeepsie, N.Y. and Seoul were established with the goal of helping financial services clients undertake the "progressive renovation" that is necessary to modernize aging computer systems, Felix says. The BCOE's will help "de-risk the migration to new technology," she says.

IBM's customers and other independent software vendors will be able to visit the BCOEs for hands-on training and demonstrations. IBM will also be leveraging the centers on a virtual network throughout the world, Felix says. At the core of the BCOE is IBM System z mainframe technology.

Felix says that the BCOEs are a direct response to the many global business challenges banks face today including global competition, a fluid regulatory environment, rising operating costs and growing consumer indifference about their banking relationships.

For example, IBM Global Business Services and the IBM Institute for Business Value recently published research results showing U.S. banking consumers don't feel valued by their bank and are unwilling to commit to deeper relationships with them.

"Customers are not feeling heard," Felix says.

The research concludes that banks must forego traditional approaches to customer relationship management and focus more on understanding and improving the overall customer experience.

According to IBM, two primary roadblocks banks face in trying to better understand the customer experience are aging banking application systems that don't easily share information across banking channels and traditional customer relationship management practices that focus more on functional services like loyalty and retention programs instead of new processes that capture and improve customer experiences.

The BCOE will work with banks to help design and implement next generation back office systems, transforming their legacy application software to flexible, open standards-based core banking and payments solutions. As a result, banks can more quickly adjust to shifting market conditions, lower operating costs and achieve a single view of customer information, leading to more personalized banking products and services for consumers.