Sun in Retail Banking

To help banks meet strategic objectives, Sun focuses on four key areas: core banking, branch renewal, channel integration, and e-payments.

Sun Microsystems has been a presence in retail banking since the mid-1990s, when forward-thinking companies began to grasp the potential of the Internet. Many of them have worked with us to launch Web-based services and rearchitect their operations using Java technologies.

For a while, banks got carried away by the Internet revolution, believing in the potential of one-size-fits-all online delivery. Today, however, they have come to understand the importance of a high-tech, high-touch multi-channel approach. And they see what Internet technologies can do for them as they restructure their operations to focus on serving customers in a variety of ways. But the overriding challenges are still customer retention, cost control, and revenue generation.

Sun recognizes the importance of these issues as it builds relationships with retail banks. We work closely with independent software vendors (ISVs) to deliver solutions that not only address the mandatory issues of risk management and regulatory compliance, but also cater to individual banks' strategic objectives. Our solutions in retail banking focus on four main areas:

Core Banking
Once the exclusive preserve of mainframes, core-banking systems are the heart of the bank, and if handled right, they can contribute mightily to the bottom line. By removing applications from the mainframe and running them on a Sun platform, banks can typically achieve cost savings of 30 to 40 percent. In addition, they can improve operational efficiency by up to 30 percent. In other words, a task that previously took 100 hours can be completed in just 70.

The strength and scalability of the Sun Solaris Operating System, coupled with the real-time processing capabilities of Sun servers, has prompted upwards of 20 core-banking specialists to go to market with Sun. As these ISVs clinch a steady stream of deals, their benchmarks get better and better: 18 million transactions per hour is the current high.

Branch Renewal
What financial institution would pass up the opportunity to cut branch-computing costs by up to 70 percent? That's the order of savings over a five-year period estimated by early adopters of Sun's ultra-thin client branch architecture and a teller solution developed by a Sun partner. With an ultra-thin client architecture, applications reside on the server rather than the desktop and are delivered through a Java technology-enabled Web browser. That's the key to the savings: Banks no longer have to employ legions of support staff to manage software on a host of standalone desktops.

Clearly, the zero-administration branch is on its way. But our solution reduces costs further by providing an alternative to the PC. With a network of Sun Ray ultra-thin clients on the desktop, banks can say goodbye to the high costs of software licensing, as well as security concerns such as worms and viruses.

Sun's solution depends on a new type of hardware called a branch controller. This intelligent device runs the teller application, provides the computing power for the desktops and connects to the data center. Better still, the controller is configured by a smart card and managed remotely by the data center, eliminating the need for local IT support in the branch.

Channel Integration
Working closely with ISV partners, Sun is helping banks create a single Web-based channel infrastructure that makes it easier to provide high-quality service and, as a result, retain customers. An integrated infrastructure gives staff a single view of each customer. At the same time, regardless whether customers choose to access the bank via ATM, call center, the Internet, or cell phone, they have a single view of the bank. For customers and staff alike, the experience has a common look and feel. It paves the way for banks to cross-sell products, personalize services, and launch innovative new offerings.

E-Payments
The final component of Sun's value proposition for retail banks targets the back-office payments process. Alternative payments systems that leverage the power of the Internet are rapidly gaining acceptance among businesses and consumers alike. But person-to-person models such as the eBay-owned PayPal also pose a threat to banks. Sun is ready to help banks install an e-payments infrastructure that will allow them to move existing retail relationships to a Web-based paradigm, then take advantage of new opportunities as e-payments evolve.

Sun established a presence in retail banking as the Internet vendor of choice. Today, working with specialist developers, we are using our infrastructure and networking expertise to help banks revitalize core systems, deliver online services, and introduce the high-tech, high-touch branch.