Software // Enterprise Applications
News
10/17/2005
02:00 PM
Connect Directly
RSS
E-Mail
50%
50%

Banks Moving to Implement Service-Oriented Architecture

Worldwide expansion, process efficiency, greater customer sophistication, emergence of new competition, and increased regulatory demands are forcing banks to improve systems, a survey shows.

Banks will make increasing use of service-oriented architecture and business-process management as they seek to deepen customer relationships, according to a report released Monday by BearingPoint and Datamonitor.

The report, based on interviews with chief information officers at leading global banks, revealed five dimensions of change that will characterize the industry over the next five to ten years: worldwide expansion, process efficiency, greater customer sophistication, emergence of new competition, and increased regulatory demands.

The need for transformation is being driven by a trend toward commoditization of transaction-based products, which is causing banks to leverage their most important asset—information. The maturity of transactional banking services will force banks "to understand customer profitability and risk more accurately," said Cece Sutton, head of retail banking at Wachovia Corp., in a statement.

Customer relationship management involves obtaining a single view of the customer via any channel—something that banks have wrested with for years. It also entails improving the look and feel of the bank branch; for example, Deutsche Bank's Branch of the Future initiative, due for completion in 2007, will include within its core infrastructure a redesigned Internet bank, CRM analytics, performance management tools, and advisory services.

Business-process management software is being used to reduce manual tasks in a number of processes, including customer service, application processing, and credit scoring, the report noted. In check processing, for example, the Check 21 law lets banks exchange images of checks in lieu of the original. Several large U.S. banks have begun the process of capturing images at the branch or ATM, and will begin exchanging images as soon as a critical mass of banks begins doing so. Workflow and document management technologies are being used to streamline the credit approval process.

Enterprise systems architecture is deemed critical to the transformation process. More than half of the survey respondents cited "service-oriented architecture" as the breakthrough technology in retail banking, and nearly all have implemented SOA. Enterprise architecture allows for greater linkage of internal and external applications, and for reusing services and data across an organization. The presence of a Web-based architecture frees banks from a reliance on legacy systems and also eases the systems integration task following mergers and acquisitions.

Comment  | 
Print  | 
More Insights
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps – and it's past time for those with no plans to get cracking.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - August 20, 2014
CIOs need people who know the ins and outs of cloud software stacks and security, and, most of all, can break through cultural resistance.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.