Keeping pace in the ever changing financial industry
MARTIN KEEN 1200007VU3 MKEEN@US.IBM.COM | | Tags:  martin_keen manager ftm financial transaction merger aquisition
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I recently received a letter from my line-of-credit provider telling me they had been acquired by Bank of North Carolina. Two weeks prior, I received a similar letter from the bank holding my savings account, informing me they had merged with another bank.
Unless you keep your money under a mattress, you probably have first-hand experience of mergers and acquisitions in the financial industry too. It's a minor inconvenience for us, the account holder, but just imagine the technological upheaval for the financial institutions, trying to merge environments with diverse technology stacks, platforms, and transaction formats.
The reality for many financial institutions is a transaction processing environment that has evolved through a combination of organic development and a merger or acquisition. These institutions have multiple systems to process payment, trade, and security messages, and these systems have morphed over years and decades to keep pace with the particular needs of a department, function, or customer set.
So what happens when you have so many systems? Typically it means you'll see process duplication. Different systems and formats performing overlapping tasks. And process duplication is rarely a good thing – inconsistent duplicate systems typically result in workflow friction, slowing client relationships and time to market. In some situations, process duplication is so bad that these systems can represent a higher percentage of expenses than they do revenue to a financial institution.
Fortunately, there's a solution that's agile to change, facilitates reuse of processes, and provides a streamlined environment that is easier to maintain. And that solution is IBM Financial Transaction Manager.
I recently worked with a team of IBM Financial Transaction Manager subject matter experts to put together the IBM Redbooks Solution Guide Tracking Payments and Securities with IBM Financial Transaction Manager V2. This Solution Guide was written by John Arnold, Verena Michel, Rod Moon, and Robert Snider, under the leadership of Manoj Puthenveetil, and provides an overview of the capabilities of Financial Transaction Manager, aimed at technical buyers and sellers.
The Solution Guide notes that IBM is the largest vendor in the payments industry and that IBM computers and systems process many of the payment systems around the world. Financial Transaction Manager contains a middleware infrastructure consisting of products such as WebSphere Message Broker and DB2 that implement Financial Transaction Manager components such as the Transaction Database, Message Mapping Services, and Alert Management Services.
The Solution Guide also provides usage scenarios for Financial Transaction Manager, including the European bank that wanted to receive different types of payment orders from their enterprise customers, through different available channels. It's a quick, informative, read.
So next time you're cursing your bank because a merger or acquisition means you'll need to change your PIN number or check book, take a moment to think about what's going on behind the scenes, and how IBM Financial Transaction Manager can make this huge technological shift manageable and adaptable.
Martin Keen is an IBM Redbooks Project Leader. He works with technical experts to create books, guides, blogs, and videos. Follow Martin on Twitter at @MartinRTP.