Microsoft Vision for Banking Enables Full-Service Customer View,Making Retail Banking More Personal, Channels More Effective

NEW ORLEANS, Nov. 18, 2003 — Microsoft Corp. today unveiled a business and technology vision for the banking industry that enables retail branch banks to become more personal for consumers while empowering banking channels to deliver a more integrated, full-service customer view. The vision, built on Microsoft’s focus on enterprise integration, aims to transform the customer experience in the bank branch and the full-service view that financial institutions have of their retail customers.

Warren Lewis, Microsoft’s managing director for the banking industry, detailed the company’s approach at BAI’s Retail Delivery Conference & Expo 2003. Just because banking is becoming progressively more competitive, he said, doesn’t mean that banking channels must become more impersonal or offer anything less than full service. On the contrary — the renewed focus on the importance of the branch after a move to online banking points to the need for personal banking within the mix of services.

solutions are designed to help banks increase their competitive potential by providing a full-customer view, full-channel delivery and full-service bank personnel — no matter if you’re at a large branch or drive-through teller, or accessing information online or via an ATM,” Lewis said. “Because banking now faces one of its most competitive eras, it is imperative that financial institutions differentiate themselves by providing a 360-degree view for customers as well as for their own people. We believe the ability to make banking more personal and the bank’s view of the customer more comprehensive is the key to future competitiveness.”

Microsoft enables business success for banks because of four distinguishing capabilities:

  • Integrated customer focus. Microsoft technologies empower individuals throughout the enterprise to deliver the integrated customer focus that leads to market-share and wallet-share advantage. Microsoft solutions unite entire financial institutions around front-line employees, allowing everyone from the datacenter and the call center to the teller window to contribute to high-quality experiences that attract and retain profitable customers. Building on the most familiar and widely used technology, banks can get information to the right people at the right time — with more time spent focusing on the customer and less on how to use the software.

  • Sustainable transformation. Leading financial institutions are implementing Microsoft solutions to transform their businesses, reduce inefficiency and break away from their competitors — while building capacity for continued innovation. Microsoft’s industry-leading R & D investment, coupled with technologies such as Microsoft .NET, is helping retail banks gain greater business visibility and make better and faster business decisions. A greater level of technology integration also has the added benefit of helping banking institutions more effectively keep up with ever-changing market demands and regulatory requirements.

  • Best economics. Microsoft and its partners offer affordable solutions that deliver lasting value through simplicity, ease of management and the flexibility to integrate with existing systems. Better integration and faster deployment pay off in labor costs — both now and as financial institutions implement future technologies.

  • Market responsiveness. Microsoft solutions and technologies help financial institutions deliver “must-have” products and services. The flexibility of Web services with .NET not only enables the IT staff to turn innovative business ideas into profitable products in record time, but also creates the ability to quickly adapt to the changes of the market.

Microsoft Experiences Momentum in Retail Banking

Microsoft today also said that the industry is endorsing its approach and pointed to several recent customer and partner successes in branch banking:

HP Develops Open Bank Strategy

HP and Microsoft today outlined a strategy to co-develop HP’s multichannel retail banking framework based on Microsoft .NET and Web services technologies. The framework focuses on providing simplicity, standardization, modularity and integration for channel applications in order to provide a single source of information related to customer activities across the channels. This framework gives customers a choice of investment and the flexibility to leverage consistent functionality from multiple ISV partners to develop a reference architecture, infrastructure stack and tools, enabling true channel integration that does the following:

  • Supports the customer’s channel applications

  • Allows the customer to select from multiple industry standards

  • Supports and pre-certifies industry-leading ISV applications

  • Reduces time to solution and risk by pre-integrating these components

Wachovia Integrates Back-End Systems for Comprehensive Customer View

Directly in line with Microsoft’s vision for retail banking is Wachovia’s rolling out of a Microsoft-based solution from ARGO Data Systems that integrates with several back-end systems to provide a comprehensive view of each customer relationship. Sales and service personnel at Wachovia’s retail banking centers are presented with a consolidated view of all relevant customer information, including contact and transaction history across all customer service channels, all customer accounts, and additional products or services that the customer may need. Taking a relationship-based approach to customer service instead of an account-based or transaction-based perspective will deliver several benefits, including higher customer satisfaction, increased customer retention, greater service efficiency and the opportunity to drive new revenues.

FCB and NCR Partner on Check Clearing for the 21st Century

Microsoft’s strategy of providing bank channels with more full-service capabilities across branches as well as regional and central channels was underscored in a joint presentation with NCR Corp. and First Citizens Bank (FCB). FCB, a leading bank with $12.36 billion in assets, built Image Capture, an FCB check deposit service that leverages NCR and Microsoft technologies. With declining check usage and the threat of increasing unit costs, Image Capture ensures more efficient and effective use of existing deposit channels and reduces fraud.

Retail Branches Grow in Importance

Many industry experts watching the rise of technology’s influence in banking have long predicted that the branches would disappear. However, that prediction appears premature. Data from Federal Deposit Insurance Corp. shows that more than 87,000 branches were covered by that federal agency in 2003. In addition, a February 2002 survey from research firm TowerGroup reported that total spending by U.S. banks, thrifts and credit unions on new investments in the branch network will reach $750 million in 2005.

Bankers also are currently paying closer attention to customer preference, which often is in favor of the branch and the face-to-face contact it provides for handling applications or dispensing advice regarding products and services. In a March 2002 survey, TowerGroup found that in 93 percent of U.S. households, at least one person had visited a branch within the previous month. Microsoft’s strategy is to provide the products, solutions and partners that can help financial institutions reinvigorate the branch and turn that asset and the services it can offer into a competitive advantage.

About Microsoft in Financial Services

Microsoft is a leading provider of software products and technology to the financial services industry. Its customers operate in every area of retail banking, insurance and pensions, and the financial markets. Microsoft focuses on helping provide the security, scalability and reliability that the financial enterprise requires. Through Microsoft .NET and XML Web services, Microsoft helps customers act on information any time, any place and from any device.

Working with leading software vendors and systems integrators in the banking, insurance and financial markets industries, Microsoft supports financial institutions in re-engineering core business operations, achieving straight-through processing (STP), better managing all aspects of risk and capital adequacy, increasing efficiency in branch banking operations, and establishing a new generation of telephone and Internet-based financial services channels.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Editors: Warren Lewis, Microsoft’s managing director for the banking industry, will participate in a panel titled “Distributed Check Image Capture — Motivations, Integration and Innovation” on Thursday, Nov. 20, from 8a.m. to 9 a.m. CST at BAI’s Retail Delivery Conference & Expo 2003 with representatives from First Citizens Bank and NCR.

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