IBM legacy systems are deeply embedded in the financial services industry and that influence will continue for years to come. But to avoid becoming a commodity provider of tools and to establish itself as a business solution provider that drives value for companies, IBM has worked to bolster its business analytics offering through a series of acquisitions. It has also opened innovation centers around the globe. According to Srini Giridhar, IBM's global banking lead, it is time and money well spent.

To succeed, financial services firms increasingly understand that they must turn their mountains of data into insights. They must develop a single view of the customer, and focus on the products and services that most appeal to these customers and are most profitable for the enterprise. All this takes robust analytics.

"Once upon a time, there was cache to being a financial supermarket across the world. Now it's not about size, it's about focusing on the areas that are profitable," Giridhar said. "Analytics is a way to simplify problems, but you must invest in it. That is the route to success. ... IBM is building engines around this."

Today, IBM is working with 22 of the top 24 global commercial banks and the top 26 property and casualty, life and health insurance companies in the U.S., he says.

IBM has invested more than $12 billion in the analytics space over the past decade. In the past 12 months, IBM has opened seven new analytics centers (in New York, Washington, London, Tokyo, China, Berlin and Dallas), and has assembled 5,000 analytics consultants with expertise across industries. As part of that investment, IBM has acquired Cognos, a business intelligence firm, SPSS, which focuses on statistical analysis software, and most recently, Netezza, another analytics vendor.

To pull all these acquisitions and research together to better coordinate its financial services offering, IBM announced last year the creation of the Banking Industry Framework. It's no wonder IBM is paying close attention to the sector — in 2009, financial services generated almost $96 billion of revenue, or about 28% of Big Blue's total, according to an analysis by IDC Financial Insights.

Rodney Nelsestuen, a senior research director at TowerGroup, said IBM has added some very strong technology to its repertoire of late. It's also using the innovation centers to stay, if not ahead of the pack, and least with the pack. Nevertheless, in Nelsestuen's opinion, IBM is not living up to its potential. "They've not done a strong job integrating these top-flight capabilities, and so I don't think they've gained the leverage that they should," he said. "I think they're undershooting the capabilities they have in financial services."

For instance, Nelsestuen said, some outsourcers use IBM tools better than IBM does. "IBM has the engineering expertise, but the outsourcers focus on business problems," he said. "While IBM is trying to do that too, they have a ways to go. I think they have a substantially larger role they could play than they do today.