In banking, bigger is not always better. Take Bank of America, for example. A string of some 60 mergers since the mid-1980s has made BofA the nation's largest bank, servicing 27 million households at approximately 4,400 domestic offices, 13,000 ATMs, and 30 international offices in more than 150 countries. It provides online banking access to 4 million active users.
Yet the economic downturn has signaled an end to the strategy of growth by acquisitions.
"The days of mergers and acquisitions are over, and we need a different business model to be successful," said Russell Vaughn, senior vice president, technology and operations at Charlotte, N.C.-based Bank of America. "We cannot lose sight of the fact that we are running a business. We need to keep attracting and servicing our customers, and make them happy."
As the franchise continues to grow, so have problems with managing data across the enterprise. During its growth phase, the bank has acquired at least 30 disparate, non-integrated customer databases. One of them, a data warehouse acquired through Bank of America's merger with NationsBank in 1998, had until recently been operating autonomously.
The challenge was made greater by the fact that each data warehouse was operating in a non-standard environment. Resources were being squandered on storing and maintaining duplicate data across these repositories.
"There was no enterprise focus on data quality, we lacked a collaborative enterprise architecture strategy, and we had segregated development in the area of customer-facing CRM customer relationship management," said Vaughn.
In response, Bank of America has elected to develop a central data capture and storage point. Through a single enterprise data model and standards, the bank expects to achieve the consistent, timely and accurate data it was lacking across its franchise.
"In the past, you could ask four people one question and get four different answers because all were using different sets of data. We needed a single version of the truth," Vaughn explained. "The goal was to create a fully integrated, accurate, responsive, accessible, flexible and easy-to-use system."
"The system would provide the ability to leverage information and measure return on investment ROI on customer and business intelligence activities, deploy world-class marketing analytical capabilities, improve risk management capabilities and profitability analysis," he added.
Following a detailed vendor selection procedure, Bank of America chose the Teradata data warehouse, from Teradata, a division of NCR, Atlanta, as its enterprise data warehouse platform. The platform, known as The W, defines an enterprise data model for the bank.
The bank kicked off its warehouse consolidation project in fall 2001. The project includes defining objectives for data mart delivery and consolidation over the next three years. Bank of America has already completed the first of several data mart consolidations onto its new enterprise platform.
Besides achieving one view of data, the data mart consolidations provide hefty operational savings. Since transitioning to a single data warehouse platform, Bank of America has dropped its operating costs from $11 million to $4 million per year, according to Vaughn.
The savings are a result of leveraging economy of scale, and eliminating duplicate technology and support staff.
The bank continues to aggressively consolidate remaining disparate data marts onto The W. As these transitions occur, data will continue to be modified to conform to the enterprise data model.
Bank of America is already taking steps to improve the platform's performance, recently adding a business intelligence access capability that will enable users to meet their own reporting needs.
"Our users are used to a push environment," Vaughn said. "This technology will allow them to gather the information they need."
Bank of America also plans to integrate CRM with decision support applications. By combining CRM with near real-time models of online decision support and event triggers, users will gain more specific analysis details.
"Our customers expect us to know them, and our enterprise platform helps us to better know and service them," Vaughn said. "This tool will foster more effective marketing and communications strategies, which will lead to a more relevant customer experience."
Vaughn's comments throughout this article were part of the session, "Building World Class Decision Support Capabilities," at the recent NCR Partners Users Conference in Las Vegas.
INSTITUTION: Bank of America
ASSETS: $660 billion
BUSINESS CHALLENGE: Weld disparate data warehouses into an enterprise data scheme.
KEY QUOTE: "In the past, you could ask four people one question and get four different answers because all were using different sets of data. We needed a single version of the truth." Russell Vaughn,Senior Vp, Technology And Operations