A few months after its initial push into financial technology consulting, International Business Machines Corp. has created a consulting group focused on capital markets and securities.
IBM historically has been a leading provider of technology for retail banking operations. But it has had less success on the wholesale side of the banking business.
The new group, which is headed by Kent D. Price, aims to change this situation. "I think IBM went through a period where the direction of its technology was not in line with the needs of capital markets," said Mr. Price, whose division is headquartered in San Francisco. "We would like to expand out of the back office to the middle and front offices."
He said IBM has been serving the capital markets for several years. Organizing a new division and formalizing the way teams operate should help IBM be more effective.
He estimated that about half the technology investments made by banks go to wholesale and capital markets areas. And though competition for those dollars promises to be stiff, Mr. Price said IBM is committed to securing a larger share.
"This is not going to be a leisurely walk in the park," he said. "We're making a real effort, and this is going to be a hard job."
IBM has set up teams of consultants, content specialists, and service employees in London, Tokyo, Boston, Chicago, and San Francisco to serve commercial banks, securities houses, investment banks, and stock exchanges.
As foreign markets heat up, IBM is considering opening offices in Frankfurt, Zurich, Amsterdam, Hong Kong, Singapore, India, and China.
"The capital markets world has really become internationalized, and risk management is a particularly hot button for financial institutions," said Mr. Price.
He has done stints at a number of banking companies, including Citicorp, Bank of New England, and BankAmerica Corp. Before joining IBM in 1994, he wrote a book titled "The Global Financial Village."
In addition to getting involved in wholesale areas of banking, IBM wants to get more active in stock exchanges and on trading floors. "We're trying to make our division as comprehensive as possible," Mr. Price said.
IBM garners more revenue from financial institutions than from any other vertical market. Last year about $13 billion of IBM's $76 billion in revenue came from banks and thrifts.
"Our goal is that securities and capital markets grows so that it becomes as powerful as retail banking," said Mr. Price.