Decades of unchecked channel proliferation have driven up the cost and complexity of IT, delaying the introduction of new products and creating a fur ball of code that no one has wanted -- or is able -- to untangle. But that is now changing.
According to a Celent survey of CIOs across North America, customer centricity was the No. 1 IT priority for 2006 (see chart). Many retail banks are now focused on understanding their customers and deepening the relationships. To do this they must obtain a single view of the customer so they can understand customer profitability and next-best product.
The next step is to make this information actionable across channels. San Francisco-based Wells Fargo ($500 billion in assets), for example, is targeting "Gr-eight" -- eight products per customer. Cleveland-based National City ($140 billion in assets) is working on relationship pricing. Both use service-oriented architecture (SOA) to help achieve this business need.
Because SOA comprises loosely coupled independent modular services to support business and IT requirements, the services don't need to run on the same platform. This is helpful in a banking environment where various legacy systems may run a mainframe, an iSeries or a Unix system. And because these modular services can be broken down into granular services that can be reassembled to form other composite services, their reuse will lower cost, speed new products to market and increase consistency. Since SOA is designed to work across environments, it is an ideal tool to link disparate core systems to multiple front ends.
The confluence of the business demands for information across lines of business with the evolution of SOA bridging across technology silos has created a perfect storm. Vendors from IBM (Armonk, N.Y.) to Fidelity National Information Services (Jacksonville, Fla.) to S1 (Atlanta) have been building and deploying SOA frameworks for banking that include banking data definitions and banking service definitions.
Still, SOA does not magically make silos disappear. In order to successfully implement SOA, various lines of business must get together and agree to definitions for important items, such as: What is "available balance"? What is a customer? If lines of business can't agree to such definitions -- or have agreement forced upon them -- SOA will fail. But if a bank is willing to impose discipline across lines of business in order to attain a single view of the customer, SOA is the most appropriate way to achieve this goal.