Canada’s National Bank Financial has re-signed with IBM
in an eight-year outsourcing contract that includes plans to upgrade the bank’s enterprise network for straight-through — or same day — transaction processing.
The project to upgrade Canada’s systems for STP is part of an overall outsourcing contract the bank awarded IBM that’s worth about $134 million U.S. ($200 million Canadian).
The deal builds on an existing contract between the two, the companies said, but also includes an agreement to upgrade the bank’s brokerage services.
Straight-through processing, or STP, is the financial industry’s
long-running goal to clear trades and transactions on the same day and
eventually, in real-time. Right now, most of the industry is in T+3 mode, meaning trades settle within three days. Many firms, however, have moved or are moving to T+1, meaning trades are settled within one day of parties and trading counterparties striking deals or transactions.
The eventual goal is to achieve real-time transaction processing.
In addition to helping the bank improve its response times to customers’ calls, the upgrades to its network systems are expected to pave the way for the bank’s move to same-day straight through processing.
NBF and IBM said the new services provided in the contract would include managing NBF’s applications, integrating call systems with customer databases, and introducing new Web-based offerings and workflow tools.
As is customary in outsourcing agreements, about 115 NBF employees are expected to join IBM’s own outsourcing teams in Montreal and Toronto, where the companies have operations.
NBF is the fifth-largest investment dealer in Canada. It also provides correspondent brokerage services to third parties.
The bank deal with NBF adds to a string of outsourcing contracts that IBM’s Global Services Group has won in the financial services vertical in recent months. They include outsourcing pacts with J.P. Morgan, American Express, AXA Financial, Visteon and Deutsche Bank.
