IBM Delivers Banking Back-Office Solution

06/29/2005

IBM today announced a new solution to help banks renovate their back-office systems and compete more effectively in the emerging “on demand” world.

The company provided to following details:

The new Core Systems Transformation solution (CST) represents a $140 million investment by IBM. It is a comprehensive portfolio of transaction processing platforms and services from IBM, which allow banks to migrate their back-office systems to modern Internet architectures in a phased, risk-minimizing manner.

The move comes at a time when banks worldwide are grappling with aging back-office systems that are hampering bankers as they seek to improve service to customers, deliver new products, manage costs and strengthen risk controls in today’s competitive and increasingly global banking environment. Banks’ “back-office” or “core-banking” systems are the mission-critical systems that process data and transactions for mortgages, loans and deposits.

IBM has blended innovations in business processes optimization and technology advances into a comprehensive approach to core systems renovation. The main components of the CST solution are:

• Business Transformation Methodology. IBM’s Component Business Model technique and Information FrameWork data models help banks identify back-office “hot spots” ripe for optimization. This methodology, currently in use at dozens of financial institutions worldwide, uses a phased, modular approach to core-systems replacement, allowing these systems to be renovated in a progressive fashion rather than the traditional “big bang” approach. IBM’s Business Consulting Services unit has trained hundreds of banking specialists in this methodology, which is capable of supporting even complex multi-national engagements.



• Transaction Processing Infrastructure for core banking, based on IBM’s flagship WebSphere software and eServer and TotalStorage systems. This open, standards-based platform uses a services-oriented architecture to deliver core banking functions as flexible web services. For CST, IBM is enhancing WebSphere by boosting transaction processing throughput, incorporating batch processing capabilities, and extending system monitoring/management capabilities, thus meeting the mission-critical operating requirements of core-banking systems. This software has been optimized to run on IBM’s market-leading p- and z-series eServer hardware, under either Z/OS or Linux; database and transaction processing workloads can be split on to separate platforms if desired, and mixed z/p configurations are supported.



• Support for market-leading core-banking applications. IBM is working with best-of-breed providers to tightly integrate and adapt their back-office applications to exploit the advantages of the new CST transaction processing platform.

IBM and strategic partner Fidelity Information Services are now delivering the first implementation of CST, a version of Fidelity’s Corebank product that has been rearchitected as a fully compliant Java application exploiting CST infrastructure including IBM zSeries, pSeries and TotalStorage. This new Java version is available immediately and has been shipped in Japan under the name “Next Evolution in Financial Services Systems” (NEFSS), and has been delivered to the first client, Suruga Bank.

NEFFS builds on the extensive functionality available in Fidelity’s existing Corebank product. Corebank provides true real-time, component-based core-processing capabilities within a relational database environment based on IBM’s Information FrameWork data models and is tightly integrated with IBM’s software/hardware stack. Fidelity has long been a feature/function leader in core banking, with more than 2,000 financial institution clients.

“We are delighted to build on our successful partnership with IBM to bring to market this ground-breaking solution. Working within the CST framework, global banks are now able to migrate to best-of-breed technology through a componentized implementation approach working with two leading companies,” said Jim Wilson, president, Fidelity International Division.

“We are at the beginning of an important new era in the evolution of banking technology,” said Mark Greene, IBM’s general manager for the global banking industry. “The combination of IBM’s business-process expertise, standards-based advances in our software and hardware, and next-generation applications marks a new age of back-office capability.”

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