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Musashino Bank to Outsource Backbone Systems to IBM

Includes All Development, Maintenance, Operation and Management for Ten Year Period

Tokyo, Japan - 14 Dec 1999: business solutions, including electronic banking, and enable it to manage costs while expanding its IT systems to meet the challenges of future growth.

The work will be undertaken by IBM's services arm, IBM Global Services, the world's largest IT Services company, which has signed a large number of strategic outsourcing contracts with financial institutions and other industries in Japan over the last few years.

Musashino will outsource development, maintenance, operation and management of its IT infrastructure systems to IBM. Both parties expect to finalise the contracts before the end of the year, with work beginning in April, 2000.

Regional financial institutions in Japan are facing increasing demand for electronic services from their customers, while facing dramatic developments in information technology and expansion of their areas of business operation because of deregulation.

Outsourcing to IBM will support Musashino's operational strategies, including the establishment of an information technology infrastructure that will enable precise, rapid response to the needs of its customers. In addition, the bank will improve the cost structure of its IT operations, while simultaneously improving its total financial service offerings.

Mr Masami Kurihara, General Manager, General Planning and Management division of Musashino Bank said that one of the impetuses for outsourcing to IBM was that the Bank is currently facing a number of issues in its information technology department, all of which would have resulted in increased costs to the bank.

"We selected IBM because they not only have leading-edge technology but also have abundant experience in the Japanese regional banking industry and a long time partnership with Musashino Bank," he said.

"We are seeing an increased need to scale up our IT systems; increasing the level and complexity of our various business processes, and disaster control. In addition we face the problem of maintaining a skilled IT workforce. The bank is also having increased demands placed on it, by our customers, to make active use of leading-edge technologies and high-caliber know-how, in order to offer new, competitive products and services speedily," he said.

In order to resolve these issues, Musashino Bank is outsourcing all of its IT system work, including development, maintenance, operation and management, but excluding planning and design functions to IBM. It is expected that systems at the Yono Operations Center will be transferred to an IBM's Haga center, in Tochigi prefecture, to make fullest use of IBM Japan's know-how.

Mr Mark Lewis, General Manager Banking and Finance, IBM Global Services, Asia Pacific said that this outsourcing agreement would allow Musashino Bank to reduce system costs and restructure its back office systems as well as carrying out future plans for improving customer service such as providing a 24-hour-a-day,365-day-a-year service via telephone and the Internet.

"We are very pleased to have this opportunity to help lead Musashino Bank into the era of e-business by helping it develop new electronic methods for servicing its customers, in addition to providing a strong IT infrastructure that will allow Musashino to implement its business plans and strategies while remaining focused on its core business," he said.

Since its establishment in 1952, The Musashino Bank has focused on "regional coexistence" and "customer respect." As a regional financial organisation in Saitama Prefecture,Japan, the company is enhancing the quality of its comprehensive financial services. At present, it has 96 branches -- 94 within the prefecture and two outside the prefecture, -- with a total workforce of 2,250 employees.

IBM Global Services is the world's largest information technology services provider, with 1998 revenues of approximately $29 billion. Services is the fastest growing part of IBM, with more than 136,000 professionals operating in 160 countries. IBM Global Services integrates all of IBM's capabilities -- services, hardware, software and research -- to help companies of all sizes realise the full value of information technology. For more information visit http://www.ibm.com/services.

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Contact(s) information

Fred P. McNeese
IBM
813-5572-2643
fredmc@jp.ibm.com

Amanda Garland
61 2 935 44881
61 2 935 44881
amandag@au1.ibm.com

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