A Tale of One City: Core Renewal via SOA at National City Bank

by Bart Narter, December 12, 2007

Abstract

San Francisco, CA, USA December 12, 2007

National City Bank has employed SOA to successfully modernize its core banking system by providing cross-LOB relationship pricing. The bank found that a new level of profitability and growth could be achieved by understanding the value of the customer.

SOA is one of the more frequently heard, but rarely understood terms in the IT community. In a new report , Celent examines service-oriented archiecture's use in integrating disparate systems. National City has developed a new, customer-centric business model to drive organic growth. The company used SOA to enable the transition of the bank's core architecture from traditional silos based upon lines of business to one that enables flexibility across products. It is grounded in the bank's ability to understand the present and potential value of the customer.

National City faced the business challenges of a mature market and increasing pressure on NIM. The bank successfully took a proactive approach in addressing those challenges, bringing in IBM Global Services and its Component Business Model to conclude that Customer Management Objectives and relationship pricing would drive the bank to the next level of profitability and growth.

"National City Bank redesigned their IT organization, their infrastructure, and their approach toward the bank's retail business," says Bart Narter, author of the report and senior analyst with Celent's banking group. "The accomplishment of such a dramatic realignment in both LOBs and IT reflects the maturity and flexibility of the entire organization."

A table of contents is available online.

Members of Celent's Retail Banking and Wholesale Banking research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

San Francisco, CA, USA December 12, 2007

 

Executive Summary 03
  The Business Need 04
  The IT Response 04
Background: SOA Isn't a What, It's a Way 05
  Definition of SOA 05
  SOA Drivers At National City 05
  Managing SOA 05
  Shared Services 06
  Shared Infrastructure 07
A Tale of One City 09
  The Business Need 09
  The IT Response 10
  IBM's Component Business Model 11
  Options for the Core 13
  Urban Renewal Projects 14
  IT Department Remodel 16
  Funding the Renewal: National City's Enterprise Line of credit 19
Taking SOA to the Front Line 19
  Points from National City 19
  CMO to Relationship Pricing 20
  Linking CRM Systems: InterACT and InterLink 22
  Electronic Funds Transfer (EFT) 24
Conclusions 25

 

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