In the UK, every bank is in hot pursuit of the same holy grail: to liberate vast quantities of customer data from the information silos where they are held so that each arm of the business can access all a customer's dealings with the bank at the push of a button.
But gaining a single view of customers is easier said than done. The technology infrastructures of the UK's banking giants consist of a multitude of computer systems running independently, each storing vast amounts of customer data.
While a bank's different businesses - such as mortgages, loans, personal, investments and commercial - all have their own separate databases, they frequently share customers. Making all this customer information available in one place is a key long-term banking goal because the business benefits for getting it right are massive.
In a nutshell, a single customer view would allow banks to save money and time, add value to the brand through improved customer service, and give bank staff better information when making decisions about providing financial products.
Ralph Silva, analyst at TowerGroup, sums up the advantages of data integration as reduced operational effort and better cross-selling capabilities.
But it's not just about performing more efficiently, it's also about reducing risk. "By not seeing the complete customer relationship, banks are susceptible to inappropriate risk calculations that considerably increase their exposure," Silva says.
With the current sub-prime mortgage fallout still weighing heavily on the financial services sector it is clear that banks are not immune from the damages caused by bad debt.
Integrating customer data is of strategic importance. The principle helped finalise the takeover of Abbey in 2004 by Spain's Banco Santander, as achieving a single view was a key factor for both parties. The fact that Banco Santander could fast-track the UK mortgage bank towards achieving that single view of customers was a major attraction to Abbey shareholders because it was seen as a way to cut costs and improve services to customers.
Abbey is currently implementing Banco Santander's global banking system, which is due for completion in the summer. The Parthenon system, as it is known, is a platform developed in-house which offers front-to-back customer processing.
"It moves us from silo-based product systems, where we don't have a single view of the customer, to a single customer view," says an Abbey spokesman. "In doing so we have straight-through processing, much better sales tools and improved administration.
"We'll avoid the need for customers to repeat information, and the way in which we store it means we will have it in one place rather than by product."
Multiple database merger
HBOS, which was created by the merger of Bank of Scotland and Halifax in 2001 following a £30bn deal, also has the challenge of integrating multiple customer databases from two separate companies.
Vincent Chaney, head of customer strategy for retail marketing at HBOS, says the bank is a complex business with a number of brands, but that customers view all their dealings with the bank as part of a single relationship.
"We have been expanding our single customer view over a number of years and will continue to do so as we gain a better understanding of what data is available both within and from outside the bank," Chaney says. "At present we have single customer view with operational and analytical environments across our main brands and main product groups, but there are some gaps."
According to HSBC, the advantages of a single view "are enormous". It says the customer experiences better service, which is good for business. "It offers greater loyalty, fewer errors or service failures, and less rework, as well as a much clearer picture of a customer's overall value, both current and potential," says a spokesperson.
HSBC bank says a better understanding of customers will aid cross-selling.
Another flag bearer of British banking, Barclays, is currently finalising the implementation of software to link different systems across its business in the UK to create a unified view of customers.
Olaf Theilmann, managing director for direct channels at Barclays UK, says that the services banks offer will improve when customer details are integrated.
Theilmann believes customers require three things, which all banks are trying to provide: ease of use when dealing with the bank, a personalised service where the bank knows who a customer is, and the ability to control their finances.
"A single view of customer plays into all three. It improves the experience because a customer does not have to be passed between lots of other people and they will see faster and more consistent processes."
The ultimate goal is to have a single all-encompassing customer database, with details of customers and all their relationship with the bank on it. But this is the financial services equivalent of climbing Everest 100 years ago. Despite the difficulties, though, achieving this goal would set any bank apart from competitors.
A single database would even take banks beyond a single view of customers and on to IT-automated customer processing through the use of algorithms.
Banks are climbing this mountain in stages and are currently building virtual single views of customers by using software to link existing systems.
Silva says banks can do it in steps. "First comes the technology that interconnects databases. This can be as simple as a middleware solution that can connect to relational databases. The alternative is the development of a front-end technology that aggregates various databases.
"Step two is cleaning up and moving the data to a large relational database with various front-ends designed for individual lines of business."
Marathon, not a sprint
The single database paradise is still a long way off, given the cultural changes, prohibitive costs and major technical challenges. Instead, banks are moving towards a single view through the use of web technologies to link legacy systems.
Barclays is using Java-based web services to bring all customer data to hand without the heavy cost of replacing its entire infrastructure.
"The challenge is to find smart ways of linking all the relevant systems, particularly the front-line applications and the product engines," says Theilmann. "We could rip out the IT infrastructure and start again, but that would be costly and time consuming. Lightweight Java technologies give us the flexibility to achieve this integration without any significant impact."
Similarly, HSBC is moving towards the single view through the use of software. It has invested heavily in business intelligence and customer relationship management software over the last 10 years to bring together customer details. "Our UK personal finance and commercial banking operations already have a single view of customers and we continue to develop this," says a spokesman.
In today's banking environment, where customers have various means of interacting with a bank such as online, on the phone and at the branch, HSBC uses fairly standard software and database technologies, but says the value lies in how it links multiple channels. In essence, the value is in the plumbing, supported by specialist analytical tools. Legacy tools are replaced as HSBC develops and rolls out group standard technologies.
HSBC has even begun integrating databases from different businesses and says it will continue to expand this practice.
Chaney says HBOS will continue to build on its existing infrastructure, which is based on large DB2 databases. "We will continue to build on the current system, which has two-way feeds to and from our product systems, some of which are legacy systems," he explains.
As well as the technical challenges presented by incompatible interfaces, there will be cultural obstacles to overcome when separate business units begin to share data.
"[The main challenges are] culture, culture and culture [because] people will not want to give up control of databases," says Silva.
Banks will also have to be vigilant following the creation of a single view to ensure that single views remain just that.
Chaney says that when systems are upgraded, the impact on integrated systems must be carefully monitored. "As the customer view is dependent on integration with the product and risk systems, it is vital that we keep up to date with developments to these systems," he says.
Time is also a challenge. The longer that banks continue to hold multiple versions of customer details across the business on separate systems, the harder it will be to change. Each time a bank wants to introduce a new financial product, it creates a new system which is not automatically linked in.
"All big banks have developed legacy IT architectures over time. There are new products added every year, and the architecture becomes pretty complex and not all systems are integrated," says Theilmann.
Cold winds of recession
Financial services companies have been hit hard by the credit crunch, which has blighted the global economy since the US sub-prime mortgage market collapsed. UK mortgage bank Northern Rock has already been nationalised after it had to borrow billions of pounds from the Bank of England.
Technology spending is often the first to be cut when hard times come around, but reducing investments in technology to enable single view could be suicidal for a bank because a tough economic climate will hit the weakest the hardest.
It is no surprise then that banks are not shying away from the inevitable and seem united in their desire to meet in a single-view paradise. It is, after all, a desire that stretches back over a decade.