IBM plans to transform the way banks structure their branch networks with a new integrated software, hardware and consulting system. Amid a flurry of buzzwords that will doubtless dominate the retail banking industry for years to come, Big Blue unveiled what it calls "on demand" banking at its global financial services forum in San Francisco.
Based on the Linux operating system IBM's branch transformation portfolio promises to help banks deliver fast, cost-effective customer service that responds flexibly to market conditions and customer needs. "Renewing the branch infrastructure is critical for retail banks that are looking to remain competitive, reduce costs and provide superior customer service," says Mark Greene, IBM's global general manager of banking. "On demand offerings can transform branches into vital channels for acquiring customers, improving service and maximizing customer profitability."
Bank branches, say critics, are stuck in a customer-service black hole. Psychologists agree. According to one study, just the mere sight of a bank branch promotes trepidation, leading people to walk faster past banks they are not even customers of. Even hulking monoliths such as airlines have realized that it pays to reward good customers. But walking into a bank branch, whether you've been a customer for 20 years or 20 days, you are unlikely to get treated any differently.
"What's wrong with this channel called 'branches'?" asks Greene. Somewhat inevitably, the answer is technology. Today's solutions are too "branch-centric", providing applications and technology infrastructure hooked into central host systems for transaction processing, data access and system management. This is costly and has created what tech types call "information silos"; places where your personal information and previously expressed preferences go to die. Perhaps you ticked a box on the bank's website expressing an interest in an auto loan. You might get some spam about it, but the next time you go into the branch it's unlikely the teller will ask if you'd like to arrange a consultation with the loans adviser. Your interest in a loan is lost in an information silo.
There are other signs that banks aren't coping well with the information they have. For instance, if you ask after your bank balance in a branch, through a call centre and on the internet you may get three different answers. These systems are rarely integrated in real time.
IBM's solution is described as enterprise-centric and integrated across multiple channels, such as the internet, the call centre and the bank teller. But the product is more sophisticated than just fixing the way we interact with bank tellers. Working with partners such as Intel, Cisco, Chordiant and Eontec the plan is to create an environment in which customers are satisfied in every aspect of their interaction with the bank branch.
Network optimization, resource management and performance testing allows IBM to provide converged networks and consolidated storage and servers.
Already Wing On Bank are subscribing to the new initiative, along with ANZ in Australia and banks in North America. The hope is to improve the experience of individual customers in bank branches while, at the same time, improving the profitability of the bank branch.
