The proverbial pendulum is swinging back to an appreciation of the branch as the critical focal point of retail banking relationships and activity, after a period - spurred in large part by the dot-com boom - where alternative channels such as call centers and Web banking were the centers of attention. But in today's customer-centric environment, and with advances in technologies and platforms such as customer analytics and Linux, the time seems to be right for a "transformed" approach to the branch that offers business flexibility, improved competitiveness and cost reductions, according to IBM's Mark N. Greene, general manager, banking.
Greene outlined the ways in which IBM is hoping to lead the way in this redefinition at last week's Global Financial Services Forum in San Francisco. The company unveiled what it describes as a "portfolio" of solutions for retail banks seeking to upgrade their branches within an integrated multi-channel system for delivering banking services on demand. Key to the offerings of IBM's Branch Transformation portfolio is Linux-based software, hardware, and consulting and system integration services.
Multi-platform viability that includes Linux is a key aspect of branch transformation, according to Greene, in order to enable customers' choice of platforms. This also provides a migration path for institutions that have been operating on the OS/2 platform, he noted. Additionally, incorporation of the relatively low-cost Linux platform can help banks reduce operating costs and facilitates the centralization and consolidation of processes, technologies and systems.
Other opportunities that come with branch transformation, Greene explained, include the creation of new revenue sources through enhanced sales and service, and adoption of "flexible, scalable and affordable infrastructure that rapidly addresses business needs." That stems from banks' ability to capitalize on several critical success factors, he said, including "delivering a broad product set, differentiating the customer's experience, and providing multiple distribution models and channels," including integrated contact centers and self-service opportunities such as ATMs or kiosks.
IBM's vision of an emerging "enterprise-centric" model, as opposed to the traditional "branch-centric" model reflects the company's broader on-demand strategy, based on the themes of "industry deconstruction" and "enterprise reconstruction" - a shift from a vertically integrated and business-unit optimized financial institution to an organization that is "enterprise optimized" through deployment of enabling technologies and key solutions partnerships - whether it is the purchase of a packaged solution, an outsourcing relationship, or alliance with a distribution partner such as an insurance carrier.
Accordingly, a host of IBM business partners were on hand for last week's branch transformation announcement, including Siebel Systems, Eontec, Chordiant, Cisco Systems and Intel. The new portfolio of solutions is being demonstrated and tested not only at IBM's industry integration centers, but also with a number of key customers globally. Additionally, IBM and its partners are working to develop a set of metrics and benchmarks to help track the ROI, performance and benefits of these solutions, Greene reported.