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Common architecture needed to reduce bank system integration costs

Matthew Finnegan | May 2, 2013
Banks need to adopt common architectures order to untangle the complex IT systems which are hindering innovation, according to industry standards group BIAN.

On the vendor side, software provider SunGard is already using the BIAN service definitions in the building and implementing of its Ambit Core Banking solution.

Tesselar said that the aim is to add 10 to 12 new members each year, and has his sights on bringing UK players into the fold. Although there has been no uptake in the UK so far, he notes that the group is now in talks with organisations, including a major UK retail bank, to discuss the use of the standards.

He said that many of the challenges facing UK banks are the same as in Europe and other Western regions.

"I don't think that there is any difference between a UK bank and a European bank, because they are all more or less of the same age, and they all started roughly the same time with their IT infrastructure," he said, adding that the picture is markedly different from the infrastructure in emerging markets which lends itself to greater agility.

"In North America, Europe and UK they are all at the same stage with ageing of systems, and are all facing the problems with an ageing workforce which has the knowledge of systems ageing systems."

He acknowledged that there is a valid concern among the major banks with replacing systems 'mid-flight', with the fear of disruption to critical core banking systems.

However he claims that with the introduction of common architecture will simplify the process, moving away from spaghetti-like infrastructure where all systems are connected, towards enabling a more 'layered' approach to systems.

"The major concern for each bank in their core banking environment is that, if I touch it, you don't know what happens, and before you know it I am on the headlines in the newspapers," he said.

"Everybody has to reconsider what is the best next move, and nobody wants to have an open heart surgery while the shop is still open. So you also have to find a way where you gradually can replace parts of the system."

He added: "Our landscape can help in defining which areas have the highest need, which can wait a little bit. It gives a very neutral view of how a bank looks like, and gives the opportunity to decide what areas you want to move into first."


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