IBM is establishing a new company, Regional Bank Solution and Services (RBSS), to deliver outsourcing services to Japanese banks.
The new venture, managed by IBM Global Services, will be established in Tokyo in December and will start operations in early 2001 as a wholly-owned subsidiary of IBM Japan. The organisation will start with a staff of 50 information technology specialists and business consultants and is expected to grow to over 150 employees by the end of 2001.
Currently, Musashino Bank, Daishi Bank, Kanto Bank, Yamagata Bank, Ashikaga Bank and, since 1 November, Ryukyu Bank, outsource their IT operations to IBM Japan. Other regional banks, including Hachijuni Bank, Awa Bank, Shinwa Bank, Miyazaki Bank and Ryukyu Bank, are also expected to make capital investments in RBSS.
Tadayoshi Miyamura, financial services sector vice president, IBM Japan, says that by sharing information technology and e-business capabilities, Japanese regional banks will be able to deliver better quality service at reduced cost. "As IBM Japan and the regional banks pool their expertise to aggressively deploy and utilise leading-edge IT through RBSS, joint operation of these IT systems will yield economies of scale that will serve to reduce costs," he says.
IBM Japan aims to establish outsourcing agreements with 20 banks or more by 2005, he adds. The total value of IBM Japan's IT outsourcing business with regional banks is currently US$950 million (Yen 100 billion).