This document discusses the opportunities and challenges facing banks from major trends like changing regulations, technology, demographics, and the economy. It outlines industry challenges such as retaining customers who expect personalized digital experiences. It argues that banks must embrace change, understand customers, and ensure agility, efficiency, and security. The document promotes cognitive computing and analytics solutions from IBM to gain insights from data, improve operations and compliance, enhance customer engagement, and inform better decisions. It provides examples of IBM clients that achieved benefits like increased efficiencies and revenues through solutions for marketing, customer analytics, payments, and other areas.

1. The power of
Cognitive Commerce
for Banking
March , 2016

2. The mega-trends that are creating opportunities … and
unprecedented challenges for the banking industry
Ever-changing
Regulations
Emboldened regulators are
ushering in a new era of
increased government oversight
and capital requirements; Regular
stress tests
Rapidly Changing
Technology
Digital pervasiveness; Deriving
value from data; Real-time
information; Computing resources
as a service; Privacy and security
Evolving
Demographics
Digitally astute, social; Younger
consumers entering the financial
system; A shift in wealth to
younger generations and
emerging markets
Volatile Global Economic
environment
Geopolitical instability & tension
within the Middle-East; Prolonged
global stagnation; Sluggish
Eurozone recovery
Social Imperatives
Societal and government
pressure to bring under-banked
and unbanked populations into
the formal financial system
Challenge to Brand
Loyalty
Hard to build trust (quick to lose);
Non-banks of real consequence;
Coexistence with telcos, e-
commerce; Profit pressure on
transaction services
© 2016 IBM2

3. Banks must embrace change, find new ways to understand,
engage and fulfill demand
INDUSTRY
CHALLENGES
 Customers are savvy, digitally astute, mobile, social and
expect pervasive access to services. They demand
customized experiences and offerings at a lower price points
 Entrance of non traditional competition offering better value
and experiences
 Unbundling of the banking value chain to unlock value and
scale; integration of pieces of banking value chain with other
value chains like e-commerce
 Increasing complexity in operations, operating models,
technology architecture which often do not reflect business
realities. A diverse and complicated ecosystem of platforms,
vendors and partners that needs to be managed
 Emerging regulations demand granular and frequent
demonstration of governance and control increasing the
burden of compliance
 Increasing challenges in managing operational and
financial risk
 Increasing rate and complexity of fraud
 Banks’ integral role in the financial ecosystem coupled with a
rapidly evolving technology environment exposes them to
more security breaches and attacks
Customers
Disruption
Security &
Fraud
Compliance &
Risk
Complexity
and Cost
Create a customer-
focused enterprise
Optimize risk and
compliance
Drive agility and
operational efficiency
INDUSTRY
IMPERATIVES
TECHNOLOGY
IMPERATIVES
Advanced analytics cognitive
and engagement capabilities
Digitization across the
enterprise
Componentization and
interoperability
On demand availability of IT
resources
Risk and security intelligence
© 2016 IBM3

4. Your digital intelligence is
your competitive advantage
Data that’s
inaccessible
Data outside
your firewall
Data you
possess ++
Unstructured and darkStructured and active
Customer records
Transactional systems
Predictive models
Institutional expertise
Operational systems
News
Events
Geospatial
Weather
Social media
Images
Video
Written material
Internet of Things
Other unstructured data
© 2016 IBM4

5. Only cognitive unlocks the potential in all data
Think of all that has been
accomplished using only
a fraction of the available
data
Unlock the
possibilities.What answers lie
in the 88% that
is dark?1
By the year 2020, about
1.7 MB of new information
will be created every
second, for every human
being on the planet.2
SOURCES cited in notes
© 2016 IBM5

6. For Operations
Improve loan decisioning with
faster approvals; assisting in
managing complex compliance
requirements
For Sales & Service
Representatives
Cognitive Assisted
Sales & Service to provide
expert advice
For Marketers
Analyze Trends
Real-time Personalized
Engagement
So you can make better decisions by embracing the
power of Cognitive Commerce in Banking
© 2016 IBM6

7. Master the art of the possible…
Deliver personalized messages and offers
through intuitive always on engagement
Deliver at the just right moment
seamlessly across all channels
Driven by insights to pivot between
aggregate trends and individual behaviors
…Deeper human
engagement
© 2016 IBM7

8. Master the art of the possible…
Direct-to-consumer cognitive virtual agents that
serve, guide, & advise on web or mobile
Advisor-facing applications that provide agents
& advisors with guidance for customers
Employee-facing applications that aid
knowledge workers in execution of business
processes, and compliance to regulations
…Cognitive processes
and operations
© 2016 IBM8

9. A large financial services organization in the US
With the ability to interpret complex, nuanced regulatory language, cognitive computing is transforming
compliance for one of the oldest financial institutions in the US.
72%
Accuracy achieved in the POC,
showing the solution as a viable
alternative to human expertise Thousands
of hours in time savings
expected through the elimination
of manual regulatory evaluations
© 2016 IBM9

10. Sources: IBM case studies
A leading financial
services group in Asia
helps relationship
managers in providing
higher quality, bespoke
investment advice to
customers
A large European bank
uses cognitive to gain
insights into institutional
client behavior to predict
future transactions
One of the world’s largest
banks employ cognitive to
help mass market
customers at call centers
select higher value
investments
Cognitive capabilities are helping banks to provide better service, discover
insights and to take better and quick decisions to improve business processes
© 2016 IBM10

11. But, we can help you also address today’s concerns through
a holistic approach to engagement
© 2016 IBM11

12. Marketing Solutions for Banks
Digital
Marketing
Lead
Management
Customer
Experience
Analytics
Journey
Design
Omni-Channel
Marketing
Real-Time
Personalization
IBM Marketing Cloud IBM Marketing Software
© 2016 IBM12

13. Banorte
Makes it personal across all channels to drive loyalty – with IBM Global Services and all powered by
IBM Marketing and IBM Customer Analytics Solutions.
40% 20%
Improvement in
operating
efficiencies
Return on
equity 200M
USD expected bottom
line benefit in the first
24 months
© 2016 IBM13

14. Customer Analytics Solutions for banks
Social
Analytics
Predictive
Analytics
Customer
Experience
Analytics
Cloud and Software Solutions
© 2016 IBM14

15. Dollar Bank
Drives customer satisfaction by truly understanding their customer journey’s across channels -- all
powered by IBM Customer Analytics solutions.
25S
Reduction in
average contact
call center times 30%
Fewer call escalations,
increasing customer
satisfaction
© 2016 IBM15

16. B2B Integration Solutions for banks
B2B
Integration
Managed
File
Transfer
Cloud and Software Solutions
© 2016 IBM16

17. Rabobank Netherlands
Rabobank is using IBM B2B Integration to manage growth of their trading partners cost-effectively and
securely exchange files such as ordering cash for ATMs.
66%400%
Faster to
onboard new
partners
increase in
trading-partners
over 3 years
© 2016 IBM17

18. Payments Solutions for Banks
Commercial
Payments
Cloud and Software Solutions
Retail
Payments
© 2016 IBM18

19. Scotiabank
Implemented an integrated-payments-service system that supports ongoing growth -- with IBM Business
Consulting Services and powered by IBM Payments solution.
350%
Increase
in online-report
volumes 75%
Reduction in
new customer
setup time
© 2016 IBM19

20. Sources: Nucleus Research Provided for illustrative purposes and is not intended to be a guarantee of future growth rates
or market opportunity.; Fortune 500 Rankings, and IBM Analysis, and reports from IBM VAN GIODE
350,000+
Global trading entities
connected
10 of 10
Top Global Banks are
IBM Clients
110 million
Messages a day are
transferred via IBM
Payments
11% savings
Companies report an
average with IBM
Procurement solutions
#1 Banking
technology vendor in the
FinTech Ranking
IBM Commerce delivers nearly 15x ROI for every
dollar spent
30%
of all SWIFT messages
are transfered via IBM
Payments
© 2016 IBM20

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