Estimating the growth of social media and mobile channels equals a $70 billion global opportunity across banking and other consumer-facing industries, IBM has formed a new consulting practice to offer navigation expertise for companies looking to embrace the new technologies, many of which are offered in some form by IBM itself.
Called Smarter Commerce, the practice will advise institutions on how emerging channels can be monetized through sophisticated development techniques such as matching customization to price elasticity—IBM's research has found that if banks can properly tailor products and services to customers can charge up to a ten percent premium for those services.
Some of the expertise involved in the consultations will include how to leverage new mobile and social technology as part of merchant loyalty and discount programs, as well as overall customer relationship expansion. IBM says that will require the ability to analyze massive amounts of disparate data in real time, perform predictive analytics, collaborate with retailers and consumers and process a higher volume of transactions quickly.
"The digital and physical worlds are converging [in payments], and there will be new competitors to banks that will be entering the market. Some payment schemes will be more open moving forward, enabling new types of competition for banks," says Gerard Hergenroeder, a global payments executive for IBM.
There's also monetizing going on for IBM, which has spent more than $2.5 billion in the past few years acquiring new social and mobile technology via acquisitions such as Sterling Commerce and CoreMetrics.
"With this bigger portfolio we wanted to have a dedicated practice to help clients implement these technologies," says Paul Papas, a global leader for master commerce for IBM.
