IBM Software Group Presentation Template

The Customer Centricity Imperative: 

Optimizing Customer Care and Insight in 

Financial Services for Growth and Efficiency 

Bob Palmer 

Global Financial Services Executive 

Information Management and Information On Demand 

IBM Software Group 

© 2008 IBM Corporation

2 

Agenda 

•Financial Services Trends and Challenges Demand a Customer 

Centric Approach 

•What Analysts and Companies Are Saying 

•The Customer Centricity Business Problem 

•Why Many Customer Initiatives Fail to Deliver the Value Expected 

•The Four Building Blocks of Customer Care and Insight 

•Innovate with Information to Optimize CC&I 

•Customer Care and Insight Critical Success Factors 

•Case Example - A World Leading Bank 

•IBM Banking Customer Care and Insight Framework 


3 

Industry Trends and Challenges 

Trend 

Consolidation & 

Globalization 

Challenge 

Achieve value 

and synergies 

from mergers 

Empowered 

Customer 

Offer right mix 

of products and 

services 

Risk and 

Compliance 

Optimize risk 

and compliance 

processes 

Product 

Commoditization 

Differentiate 

Market 

Disruptions 

Manage cost 

without losing 

competitiveness 


4 

CRM Imperatives: The Game is Changing 

Business Imperatives* 

Achieve differentiation and profitability 

through improved customer experience 

and innovative offerings 

Gain competitiveness through improved 

efficiency and optimized processes 

Balance risk, security and compliance 

Technology Imperatives* 

Streamline application infrastructure for 

efficiency and reusability 

Integrate enterprise information for ready 

access to lines of business 

Simplify network infrastructure and 

administration 

“Having long rested on a foundation of trust, traditional products, and resilience, financial 

services institutions are being awakened by tectonic forces altering the industry 

landscape.” Source: Guillermo Kopp, TowerGroup 2007 

*Sources: Analyst reports and 

IBM Institute for Business Value 


5 

The Empowered Customer 

There is a industry transformation around today’s empowered customer 

that represents a significant challenge, yet a growing opportunity for 

organizations that succeed in delivering the value and choice that 

financial consumers demand. 

“During the past decade, consumer 

needs have changed significantly, 

but the financial services industry 

has not evolved to meet these 

needs. This is why most financial 

services firms do so poorly in our 

customer advocacy rankings.” 

Bruce Temkin, Forrester Research 


6 

What Analysts are Saying 

“During the past decade, consumer needs have changed significantly, but the financial 

services industry has not evolved to meet these needs. This is why most financial 

services firms do so poorly in our customer advocacy rankings.” 

Bruce Temkin, Forrester 

“FSI’s that wish to grow and prosper are rebalancing their strategic objectives and 

bringing customers back into a position of primacy. Satisfying customers is as 

important as driving operational efficiency and minimizing risk.” 

Guillermo Kopp, TowerGroup 

“Institutions around the world are trying to improve their abilities to manage their 

businesses and their customers with one hand tied behind their back. In many cases, 

both the business information that is the cornerstone of effective management and the 

customer data that is the cornerstone of any relationship-building approach are still 

locked inside multiple back-end systems and datamarts.” Jim Eckenrode, TowerGroup 

“Move away from balkanized data that is unavailable to users in other functions or 

business units. A single piece of data can provide value to many users. 

(Organizations)…need a single version of the truth, and an integrated customer 

profile can help provide it.” 

Kathleen Kirallah, TowerGroup 


7 

What The Industry Is Saying 

“Our goal was to gain a ‘360-degree’ view of the customer, which we saw 

as the foundation for a better customer experience and a way for us to be 

more proactive in meeting their needs.” 

Todd Okuley, Director, Nationwide Insurance 

“We are challenged with the complexity of cultivating millions of individual 

customer relationships across multiple channels with increasing volumes 

of data.” 

Matt Harris, Head of CRM, Barclays Bank 

“We want to deepen existing and future customer relationships with 

differentiated capabilities to exceed customer expectations and grow 

market share.” 

CEO, WW Top 10 FSI 


Customer Centricity Plays a Major Role in Top Business Drivers, 

Strategic Responses and Tech Priorities for Banking in 2008 

8 


Customer Centricity Imperatives Demand an Enterprise Approach 

9 

Business Area Imperatives Objective 

Marketing, 

Sales, Customer 

Service & 

Compliance 

•Enable a valued customer experience in order to 

create customer advocates 

•Develop a single view of the customer relationship 

and deliver targeted relevant offerings 

•Turn service issues into sales opportunities to 

maximize cross-sell opportunities 

•Deliver consistent service across all channels to 

capture sales opportunities and reduce customer 

attrition 

Be customer centered 

to grow profitable 

revenue 

Product and 

Operations 

•Respond to new business models and opportunity 

•Differentiate offerings in the marketplace 

•Achieve optimal cost/income ratios 

•Simplify operational environment 

Gain competitiveness 

via continuously 

improved efficiency 


10 

Balancing Efficiency and Growth is Critical 

Too much 

focus on cost 

reduction / 

containment… 

Too much 

focus on 

customer 

experience… 

While too 

much focus 

on 

revenue… 

We must find the 

right balance… 

Can lead to 

poor customer 

experience and 

limited revenue 

Can hinder 

cost 

reduction and 

revenue 

growth 

Can ruin the 

customer 

experience and 

hinder cost 

reduction 

opportunities 

or optimally, 

maximize all three 


Common Landscape in Financial Services Hinders Optimized 

Customer Centricity 

11 

•Inconsistent View of Customer 

•Silos of Information 

•Information Locked in Repositories 

• Inconsistent Data 

•No Single Version of the Truth 

•Poor Channel Communication 


Information Management or Lack Thereof Plays a Key Role 

12 


Why Many Customer Initiatives Fail to Deliver Expected Value 

CRM Application Software as Panacea 

No True Enterprise View of the Customer 

Poor Business Process Optimization 

Poor Channel Integration 

Lack of Proper Information Infrastructure 

Poor Data Quality Processes 

13 


Customer Centricity Requires Effective Customer Care and Insight 

CC&I is focusing on front office, customer oriented business processes across 

marketing, sales, service and compliance. 

14 

What is Customer Care 

Customer oriented, information driven 

processes related to marketing, selling or 

servicing customers in financial services. 

What is Insight 

Customer oriented business intelligence 

and analytics that provide fact based input 

to drive intelligent business decisions 

Examples include: 

•LOB and enterprise marketing processes 

•Sales processes at all touch points 

including branch, agent, ATM, kiosk, web, 

and call center. 

•Customer Service processes through all 

channels including branch, agent, claims, 

call center, web chat, and web self service. 

•Compliance processes such as Know Your 

Customer and AML. 

•Process truncation and optimization 

Examples include: 

•Market analysis 

•Customer segmentation 

•Customer profitability 

•Channel usage, preference and 

profitability 

•Product profitability and design 

•Business Performance Management 


Four Building Blocks of Customer Care and Insight 

15 

Supports Key 

Initiatives 

Like… 

Customer 

Segmentation 

and Profitability 

Lending 

Optimization 

Dynamic Product 

Bundling 

Case 

Management 

Paperless 

Enterprise 

Marketing 

Communication 

Campaign 

Management 

Cross-sell Up-sell 

Customer 

Onboarding 

Contact Center 

Optimization 

Event Based 

Decisioning 

Know Your 

Customer 

Customer 

Preferences 

4 

3 

Marketing 

Processes 

Enterprise BPM 

Content Management 

Business Applications 

Sales 

Processes 




Channel Integration 

Business Processes 

Service 

Processes 




Compliance 

Processes 




2 

1 

Customer Analytics Business Insight Search and Discovery Analytics Threat and Fraud Intelligence 

•Segmentation 

•Customer Profitability 

•Predictive Analytics 

•Channel Preference 

•Branch Performance 

•Financials 

•Product Profitability 

•Planning 

•Analyze Free Form Notes 

•Monitor Service Levels 

•Churn Detection 

•Legal Discovery 

•Entity Analytics 

•Name Recognition 

•Master Data Management 

•Customer Data Integration 

•Service Oriented Architecture 

Insight 

Information Foundation 

•Data and Process Models 

•Data Warehousing 

•Information Integration 

•Data Quality 

•Channel Integration 

•3rd Party Data 


Organizations Must Create an Information Agenda 

An approach for unlocking the business value of information 

16 

Strategy 

Creating a vision to guide 

decisions & help the 

organization determine how 

to best support business 

goals 

Information 

Infrastructure 

Identifying the technology 

components & capabilities 

to establish a common 

information framework 

Implementing policies & 

practices for managing, 

using, improving & protecting 

organizational information 

Information 

Governance 

Establishing a plan for 

executing discrete projects 

to realize short and long-term 

returns on investment 

Roadmap 


Effective Customer Care and Insight Delivers Clear Business Value 

17 

Increase revenue and customer retention 

• Identify the most valuable customers to provide 

differentiated service 

•Leverage cross-sell and up-sell opportunities 

Cost reduction and operational efficiency 

• Introduce new products and reduce time to market 

• Streamline and automate business processes for greater 

efficiency 

Increase flexibility to support existing and new 

business strategy 

• Meet the dynamic requirements of the business with 

customer care and insight solutions rooted in SOA 

• Support new strategic initiatives with an integrated 

information framework 

Meet compliance requirements and reduce risk 

exposure 

• A complete understanding of customers and prospects 

increases compliance visibility 

• Proactively uncover and action fraud risk 

IBM Internal Only 


Critical Success Factors for Customer Care and Insight 

18 

Successful organizations break down silos of information and use an enterprise wide 

approach to customer information and insight. 

There must be a commitment from senior executives that information is an 

enterprise asset and that insight has a central role in decision making processes. 

A single, accurate, accessible enterprise customer view is essential to the success of 

any organization that wants to differentiate on customer centricity . 

Business intelligence and customer insight must be more than a look back-it must also 

be applied in real time, in-process and at the point of customer interaction for 

maximum effectiveness. 

An enterprise commitment to data governance and data stewardship must be made early 

for success of any major CRM initiative, with particular attention paid to data quality. 

Management of content centric processes - their truncation, automation and optimization 

will be a key success factor in improving operational efficiency and customer satisfaction. 


19 

Top 10 WW Bank Achieves Efficiency AND Enterprise Customer View 

Bank 

Objectives 

Bank 

Strategy 

Business 

Problem 

Solution 

Business 

Outcomes 

•Become a more customer focused bank 

•Assimilate acquisitions and drive organic growth 

•Rationalize infrastructure and reduce costs 

•Create enterprise customer view 

•Increase cross sell and up sell 

•Consolidate redundant customer systems and improve data access 

•Current customer information infrastructure was duplicative and costly 

•Data synchronization between systems and customer data stores complex 

•High CPU and maintenance costs of multiple systems 

•Initial initiative to replace CIF’s with CRM application MDM not viable solution 

•Implemented IBM customer data hub with services orientation 

•Established SOA/ Component Model Architecture 

•Integrated CIF information to hub in phases 

•Will replace additional CIF’s from acquisitions in phases 

•Effective enterprise view 

•$50+ million in annual cost of ownership savings - infrastructure and FTE 

•60% improvement in efficiency and 40% infrastructure workload improvement 

•Improvement in customer centricity greatly improved but not yet measured 


20 

IBM Banking Customer Care and Insight Framework 

The IBM Banking CC&I Framework helps organizations apply products and services 

from IBM and its partners together as a synergistic whole to address customer oriented 

business problems. 

What is an IBM Framework 

It is a recommended set of prescriptive 

industry solutions, services and roadmaps that 

address specific business problems. They are 

composed of: IBM software, industry data and 

process models, pre-integrated accelerators, 

partner applications, reference SOA 

architecture, and IBM services. 


IBM Banking Customer Care and Insight Framework Key Components 

21 

IBM Global Business Services 

Four Building Blocks of Customer Centricity 

Marketing Processes Sales Processes Service Processes Compliance Processes 

IBM ECM with FileNet 

IBM BPM Solutions 

Partner Applications 

Composite Business Services 

Customer Analytics Business Insight Search and Discovery Analytics Threat and Fraud Intelligence 

•IBM Cognos 

•Partner Apps 

•Info Sphere MDM Server 

•WebSphere Business Fabric 

•WebSphere Process Server 



Lotus Forms 



•IBM Cognos 

Channel Integration 

Business Processes 

Insight 



Lotus Forms 



•IBM OmniFind Analytics 

•IBM OmniFind Discovery 

Information Foundation 

•IBM Industry Models 

•IBM Information Server 

•IBM ECM with FileNet 


Lotus Forms 



• IBM Entity Analytic 

Solutions 

• IBM Global Name 

Recognition 

•InfoSphere Warehouse 

•Rational Data Modeler 

•Tivoli Access Manager 


Industry Analysts Rank IBM as Leaders in CC&I Capabilities 

22 

Leaders in: 

•Customer Hubs 

•Data Integration 

•Enterprise Content Management Suites 

•Business Intelligence Platforms 

•Business Process Management 

•Corporate Performance Suites 

•Data Quality Tools 

“Blend Cognos with IBM’s data integration, data warehouse, content management, text 

mining and other offering- and there’s no more extensive information management 

portfolio available…period. 

22 


23 

Questions 

For more information contact: 

Bob Palmer 

WW Marketing Manager - Financial Services 

Information Management and Information on Demand 

IBM Software Group 

bobpalmer@us.ibm.com

IBM Software Group Presentation Template

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