Money as intelligence
Economics powered by people
IBM Global Business Services Partner Matt English, examines the human side of economics and how our hyper-aware consumers are now helping set the standards and in effect helping define a smarter economy.
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Money rarely changes hands any more: few transactions actually use cash. In fact, hard currency represents only 11% of the money supply in the U.S. The rest of our "money" flows digitally from a paycheck to a bank to a retailer, and then through the retailer's supply chain, to be deposited in another business's account... to start the journey over again.
That means our money has been transformed into zeros and ones. It's intangible, invisible. It's information. Which is central both to the problem we face—and to its solution.
For smarter money, we have to start with smarter technology.
By applying unprecedented computing power such as stream computing software, deep computing visualisation and advanced analytics, we can turn this numerical ocean into actionable insight and intelligence. That technology is already in play with sensors ubiquitously embedded across other industries. Sensor technologies are in use to improve supply chain performance (US), healthcare network efficiency (US), city management (US) and even the monitoring of natural systems like rivers (US) by capturing information that can lead to better decision making.
These trillions of transistors also have great potential in the global financial system to provide new information that can drive growth and mitigate risk.
We can see intelligence making an impact with the emergence of smart banks. For example, the Operational Risk data eXchange Association (ORX), a consortium of 52 leading financial institutions, uses blinded data to improve statistical modeling, more accurately quantify risk exposure and address regulatory compliance needs. We even see intelligence transforming entire global markets. Consider foreign currency exchange, the world's largest single market: Intraday settlement risk of more than $2 trillion in daily volume—more than 50% of foreign exchange transactions—has been reduced to zero.
Leading thinking
IBM is working to create next-generation systems that address requirements for updated information technology infrastructures that can scale to handle unprecedented numbers of data sources and provide computing power on a massive scale. Our clients are actively involved in becoming more interconnected, instrumented and intelligent. Given this, they are quickly looking to leverage new models to address their business needs.
IBM's Steve Mills on the next frontier: real time data
IBM Software Chief Steve Mills talks about the need for speed. All companies are seeing the same data at the same time, and now, he says, it's going to be what you do with it. He says that automated markets are the next frontier.
Meet the experts
Doug Parke,
Financial Services Sector Industry Solutions Manager for IBM Australia
A series of conversations for a smarter planet
Toward transparency and sustainability: Building a new financial order
How will the financial markets industry make money in the future? The current financial crisis has exposed the problems with creating and exploiting "pockets of opacity" across the system. If the industry is to deliver sustainable returns, it will have to embrace change. It will need to begin by working with regulators to build a financial system that is stable while still allowing for healthy innovation. Individual firms will also have to specialise and learn to fulfill their brand promises.
Increasing capacity
The Depository Trust & Clearing Corporation (DTCC) experienced a 77% increase in overall transaction processing capacity after IBM re-architected its core processing infrastructure. The project enabled the organisation to enhance its already world-leading transaction capabilities, handling three times the highest volume ever recorded.
Undressing in public: Harnessing the power of Web 2.0 to rebuild trust in banking
More customers are online than ever before. This IBM Institute for Business Value white paper spells out why banks should learn to use methods such as blogging and social networking to cost-effectively and efficiently reach an increasingly fragmented and dispersed customer base.
Growing trust, transparency and technology: Insurance customers' perspectives in a global context
This updated IBM Institute for Business Value study shows that insurers in the Americas, like their European counterparts, suffer from a lack of consumer trust and that heightened transparency, service and flexibility will be necessary to reach the customer of the future.
Bank of Russia expands services by reducing data centres
As the central bank for the Russian Federation, the Bank of Russia (US) serves the interests of the state, the Russian people and private businesses. With a variety of local payment processing systems running on more than 200 distributed servers in 74 data centres across 11 time zones, the bank faced significant challenges in terms of operational efficiency, technical support and security.
IBM helped Bank of Russia migrate to a new shared architecture that was split between two data centres. This banking technology is an excellent example of what IBM has positioned as the new enterprise data centre: an efficient, simplified, virtualised, highly resilient set of shared resources capable of responding dynamically to business demands.
Payment processing costs have been reduced by 95 percent, saving US$400 million per year. Server and data centre consolidation creates further savings on hardware and software licensing, maintenance and electricity and increases security. And workload for technical staff has been reduced by 85 percent.
SBI Sumishin launches Japan's first Internet-only bank
In Japan, competition in the Internet banking business has been intensifying. In this environment, SBI Sumishin Net Bank, Ltd (US). aimed to bring to market a broad product lineup in a shorter period than other financial institutions. To achieve this goal, the bank needed to meet strict technical standards imposed on Japanese financial institutions, while seeking a competitive advantage. Sumishin asked IBM Japan to develop a totally new Internet banking platform—not to construct one based on existing assets.
IBM designed a customer-centric core banking technology solution that enabled real-time interaction with the e-trade securities system, handles eight different currencies, account settlement service in dollars (a first for a Japanese bank), and includes loan simulations.
The solution helped Sumishin Net Bank acquire about 45,000 customers within two months of launch. By utilising IBM's application development capabilities, SBI was able to deliver new services faster than competitors based on the cutting-edge solution.
Go watch the video (US) to find out how IBM helped SBI Sumishin reduce the cost of system maintenance and operation, while delivering high quality services.