RealTime IT News

IBM Shifts Products for Industry Verticals

In the wake of its recent reorganization of its software division for distinct market sectors, IBM is rolling out five new middleware packages designed specifically for the crucial financial services sector.

IBM officials said the new packages, which include 15 modules in all, are designed to help customers in financial markets, banking and insurance industry integrate, manage and automate the business processes -- and attack IT problems -- that are unique to that industry.

Doug Brown, director of industry marketing for IBM's software group, said many financial industry players are faced with a new set of compliance deadlines under the federal Sarbanes-Oxley reporting regulations this year. So the idea is to help banking and financial vertical customers "turn compliance from a necessary evil into a business advantage," he said.

For example, Brown said, IBM's new Risk and Compliance middleware package provides customers with infrastructure that helps manage regulated processes such as internal controls, data retention, financial publishing and operational risk management. Other packages include Front Office Insight, Trade and Order Management, Financial Information Interchange and Post-Execution Integration.

The wholesale payments line helps customers centralize and manage repeatable payments processing by consolidating access to external financial networks such as the international payments system known as SWIFT. One key aspect of the messaging system offered by IBM helps customers eliminate duplication of the process as well as monitor potential points of failure.

In the retail banking sector, Brown said the offerings include IBM's "Branch Transformation Solution," which helps far flung bank branches streamline how they interact with customer data, while at the same time helping them to migrate from outdated and difficult to manage branch IT systems.

For an industry that still recruits many programmers for the COBOL programming language that drives its legacy systems, the banking sector offerings arrive amid a wave of consolidation among big banks. For many banking operations, integrating new applications with legacy systems, such as different data silos that can't interact with other silos in other branches or locations, continues to be a top issue on their IT agendas.

Perhaps the boldest packages among the 15 specific modules are the ones geared for the insurance industry, widely considered one of the slowest and most cautious sector to upgrade its IT architecture -- within a financial services sector that historically pursues a "fast follower" policy of upgrading to the latest information technology techniques as a form of risk management.

Brown said the insurance packages include five new modules such as integrated claims management, integrated underwriting, policy management, channel distribution integration and insurance customer insight.

For example, the channel distribution integration package for the insurance industry consists of IBM's WebSphere Business Integration, WebSphere Portal and Tivoli products. Brown said it was complemented with industry-specific middleware capabilities provided by the WebSphere Business Integration ACORD adapter and the Financial Services Portal Workbench Framework.

"I think there are insurance companies that are willing to make investments that will reduce their cost structure," Brown said. "They're not going to touch their application software, we recognize that." And they may not be interested in adding new application servers in their online systems, he continued. "But they might very well be very interested in integrating their processes in a much more efficient way in order to drive their costs down, such as servicing claims faster."

The sales staff is also focusing on opportunities to help insurance customers reduce the length of time involved in the underwriting process, or processing claims in a more timely manner in order to reduce the cost per claim.

But Brown said the five new financial services middleware packages, including 15 modules in all, represent a different kind of upsell opportunity to Big Blue's installed base in the financial services industry.

IBM's WebSphere lines already have a very large presence in the banking industry. The idea now is to offer customers ways to extend and expand the features and functions where they have already invested, he added.

The new software packages, announced Monday, are supported by freshly-trained sales and services support teams as well as industry-specific applications built by independent software vendors (ISVs), IBM said.