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ING Making Switch to Sprint System China Project Tested Fiserv's Creativity
ING Making Switch to Sprint System
ING Bank is about to switch its corporate data network to a secure system that uses Internet protocols without being connected to the public Internet.
Mark Thompson, the head of technology at the Wilmington, Del., thrift, which does business as ING Direct, said rapid growth necessitated the move.
"We have to virtualize our organization across 2,500 miles of the United States," Mr. Thompson said. "To have a virtual organization with one heartbeat across the country, it's important to have this network."
Its new system, a "peerless IP" network from Sprint Corp. of Overland Park, Kan., has 45 megabits of transmission capacity; the old one had 6.
ING began a pilot of the new network in March and plans to switch over officially for commercial operation this month, Mr. Thompson said. "It took quite a bit of engineering work to restructure our network," he said.
The change should help ING Direct's three call centers, which are housed in the data centers. ING does not use voice-over IP, which transmits telephone calls as data packets on the Internet rather than using a conventional telephone switch, but it does use Internet protocol-based systems to route calls and to support the call centers.
"The end-user experience is much better," and the faster network provides extra backup in case of a computer crash or similar event, Mr. Thompson said. If we have to switch "over from the East Coast data center to the Midwest, it's much more seamless."
Thomas W. McChesney, Sprint's director of enterprise segment marketing, said financial and insurance companies are as concerned about data security as the government, for which Sprint initially developed the technology.
"Security, or the perceived lack thereof, is a major concern," especially for banks, Mr. McChesney said.
China Project Tested Fiserv's Creativity
Usually when a vendor installs a new core banking system for a client bank, it starts with a component such as the loan system.
But when Fiserv Inc. handled such a project last fall for Citic Industrial Bank of Beijing, the companies started with the general ledger module.
"China brought its own set of challenges," said Greg A. Green, the chief operating officer of Fiserv CBS, which produces Fiserv's international core banking system.
The installation at Citic involved some of the same challenges as any first-time implementation in a new country. For example, Fiserv had to produce computer screens and training documents in Chinese.
A bigger task was helping bankers in Beijing transform their reporting system to give more central control over lending decisions and risk management, Mr. Green said. This is complicated, he said, because China must bring its banking practices into conformity with international standards as part of its program to open its markets and participate in the World Trade Organization.
Citic Industrial Bank was founded in 1987 and is part of a large industrial group, Citic Holding Co. The bank has more than 10 million accounts.
Citic initially sought to make lending decisions at a regional level - it has 26 centers to manage lending and risk management - rather than at each of Citic's 300 local branches, which have operated largely as independent banks.
"It was not logistically do-able," Mr. Green said.
That realization prompted the decision to begin with the accounting system and to provide executives better insight into individual branches' activities. That module went into commercial operation this summer.
The loan system will be the next phase of the implementation. Mr. Green said Fiserv, of Brookfield, Wis., delivered that component to Citic in July and plans to introduce it commercially by the end of the year. The deposit system is to follow, with production planned by next spring.
