IT architecture of a successful bank, Konstantin Varov

Wednesday, September 7, 2011

Clients are not likely to forgive a bank for technical system failures – they would start discussing them in social networks, in different Internet chats, so reputational and even financial consequences for the bank can be quite dramatic. How can a bank achieve technological leadership? To become a leader in the IT area, a bank needs to build up a correct IT architecture.  From a business point of view this is a key issue – many banks are already elaborating details of a successful IT architecture construction and are trying to choose the most efficient solution. Others will eventually face the same challenge and in two or three years from now they will have to get down to it in real earnest to catch up with forward-thinking banks.   

What is an ideal architecture of a successful bank? When working out details of a corporate IT architecture it is necessary to take into account four main aspects: business processes architecture, applications architecture, technologies architecture and data architecture.

Let us review the first aspect - business processes architecture. From the banks’ point of view an ideal IT architecture is supposed in the first place to support the bank’s core business processes, the processes which allow banks to earn money, auxiliary processes which ensure resource support for execution of core processes and control processes.  The latter ones are currently growing in importance because of strengthening of regulators’ role, toughening of control over violations in the banking area and consequences for the violators.

It is essential that an IT architecture built by the bank would support execution of banking processes. And the best form of support is direct execution of these processes in the software solutions the bank has selected.  Accounting for these requirements we designed the FLEXTERA suite so that business processes make a ‘core’ of our software product. Presently FLEXTERA supports 800 most required and essential ones. They are almost all business processes, on top of that we have several execution options for some of them – depending on the segment this or that customer specializes in, specifics of legislation and activities in the segment.  We constantly work at enhancement of a new line of software products, in particular, we attend to improvement of the level of knowledge of our expertise.  Not long ago our analysts have studied the advanced practices of constructing business processes in leading Scandinavian banks.

Application architecture is also an important aspect of bank architecture. According to  Gartner expert analysis, today 80% of banks have already made their choice: their IT strategies are already SOA-oriented, or, at least, oriented at the hybrid architectural model (service-oriented and event-oriented). The FLEXTERA modular suite we have been developing for the last five years is designed according to this form-factor.  Today FLEXTERA incorporates about 70 independent products, each of them being a service provider in terms of Service Oriented Architecture. Accurate compliance of FLEXTERA products to SOA requirements has been confirmed by the results of external validations, within the framework of the IBM international expertise. Global experience proves that if a bank wants to be a success it has to build its architecture along SOA lines (or SOA+EDA).

Now let us define the technologies architecture. The right choice of technologies ensures scalability, fault-tolerance  and reliability of the bank IT architecture. Therefore, it is crucial to choose the right technologies which are designated to support the bank IT landscape.  The FLEXTERA suite is based on the multilayer application technology - this form-factor will enable contemporary banks to support the full scope of load on their existing  IT components which has been increased as a result of banking systems centralization.  It should be mentioned that the load level is getting close to the extreme values. We carry out regular volume tests and stress tests of our products and can assert that   FLEXTERA performance is characterized as unique! For instance, when we were getting ready to launch  FLEXTERA in a major Russian bank we tested the system performance on volumes of one hundred million contracts with the load sufficient  to support active work of one hundred thousand operators, working concurrently in several time zones.  However, this is not a limit for  FLEXTERA: the conducted tests prove that our product successfully handles all the tasks with the processing volumes of 4.2 million users, it means that it supports in full  the front desk tasks of a large multi-branch bank, when the self-services channels are connected and  partner companies are working etc. And the last, but not the least, aspect is the data architecture. The Gartner forecasts of IT development in 2011-2015 demonstrate that interest to this area, namely to the main data management, will keep growing. Many banks have already passed or are getting ready to pass through a stage of necessary project work: in the majority of cases this effort involves the client database centralization.  When creating the FLEXTERA line products, we have already taken care of it, having inbuilt respective components. As a bottom line I would like to emphasize the general message: if a bank wants to prosper, it needs to become a leader in the area and one of essential conditions for that is leadership in the IT area. It can only be achieved through creation of correct IT architecture. And I am absolutely confident that banks will be able to achieve their goals with the help of FLEXTERA line of innovative products from Diasoft.