TORONTO — IBM and RPM Technologies have teamed up to provide financial institutions the ability to create a single view of their customers.
RPM Wednesday launched RPM Open, a browser-based platform, which sits between a financial institution’s (FI) back office and the user or advisor’s browser. The program consolidates investment holdings across disparate systems and financial institutions. The end result, according to RPM, is the ability to make better-informed investment decisions.
Michael Biskey, vice-president of IBM’s business innovation services division for the Canadian financial services sector, said customers are looking for a company that understands their financial goals and needs, but this is very difficult if clients’ assets and liabilities are dispersed among a half dozen or more institutions.
The heart of the problem, Biskey said, is the way banks and insurance companies evolved. He said they developed a different system for term deposits than what they use to manage mutual funds, for example.
“What’s happened over time is that customer information is stored in each one of these different systems and it is very, very difficult now to bring the information together from all these different systems into one common client view,” says Biskey.
Not only is information difficult to gather across organizations and systems, but even within the same company. Biskey said one IBM client has twice as many customer records than clients. In all probability, he said, there are inaccuracies between the files.
Dave Poppleton, president and CEO, RPM Technologies, said Open offers a couple of advantages. One, financial institutions don’t have to throw out systems that cost them millions to use the platform because Open attaches to them. Two, it saves a time and money every time the federal government changes the tax laws. He said the tax processing is done on the platform so the formula is changed in one place and not in every system.
Poppleton said for smaller institutions the price tag could run anywhere from five to $15 million, while enterprise class companies could spend anywhere from $25 to $100 million. Integration is done by IBM Global Services.
According to Biskey, the market is ripe for this kind of platform. He said there are 650,000 Canadians households with investable assets of $250,000 or more. By 2005, he predicted, there will be more than 1.5 million households.
“What this asset base does is it generates key revenue for the financial services industry — $20 billion a year,” said Biskey. “That is anticipated to grow by 2005 to over $33 billion.”
