In-place modernization for core banking applications
Customer requirements are changing rapidly in line with recent world events.
Not surprisingly, the banking industry is having to move swiftly to keep pace; no longer is it enough to keep playing catch-up. They need to be creative and support customer journeys as they happen. So, the alignment of banking technology with the evolving customer journeys needs to be actioned at multiple levels:
Presentation layer: The part of the banking relationship that the customer sees when using a cell phone or PC to view their balance, transfer between accounts, make a bill payment, or pay a friend using an instant cash application. These days, thanks to mobile banking, customers rarely need to visit a branch to do things like open an account. The presentation layer is most important for keeping customers engaged with powerful user interfaces and navigation features. Furthermore, this layer is becoming more and more automated with chatbots and AI features that track and predict customer behavior
Integration layer: Data presented to customers has to reflect the whole banking relationship. Arising from multiple core systems and sources, data is integrated and presented in a way that makes complete sense to the customer. In a complex banking environment, the integration layer is even more important, efficiently gathering information from multiple systems and presenting the customized view required by the presentation layer
Core application layer: The Rip and Replace option for a core application replacement is considered a last resort in banking transformation. Why replace something when you can optimize it and provide support for changing requirements at the presentation and integration layer? In-place modernization of core banking applications is becoming more practical and popular because of this ability
Luxoft’s approach to in-place modernization
Luxoft proposes a three-pronged approach:
Optimize what banks already have in place: Optimizing the core application gets the most out of your current hardware, operating systems, storage and network. It can be done at the software stage or in the processes. Agile and DevOps provide maximum benefit, reducing time-to-market, improving developer efficiency and offering solutions that match customer requirements in a timely manner
Modernize how the core application sits in the banking ecosystem: Supporting the need for modern architecture, core applications must open up two-way access to the data stored. This can be done with APIs, by implementing event-driven architecture and providing real-time data, efficiently and more rapidly
Transform the way the core will be used in the future: In the past, supporting the major business and technical solutions, expensive hardware and storage costs, meant core applications were obliged to provide functionalities over and above their core offerings. With the recent focus on externalization and decomposition — and removing functions which should not be inside the core — core applications will be able to transform into a powerful core engine supporting banking operations
How in-place modernization will help banks
By focusing on what‘s important for the bank, customer journeys and lifestyle changes, in-place core modernization adds value to the applications and extends their useful life. Luxoft, together with partners like IBM, continue to invest in all three areas of core modernization to optimize, modernize and transform. We offer unique products and services that enable you to establish a mainframe-based core application as part of your banking transformation.
Mainframe in-place modernization solution with Luxoft and IBM
Capabilities for in-place modernization:
Optimize the core: DevOps enablement using IBM Z Development and Test Environment (ZD&T) solution certified for our Hogan Mainframe applications, offer a dedicated z/OS environment for development, testing, learning and demonstration. IBM Application Discovery and Delivery Intelligence (ADDI) provides in-depth analysis across applications. Luxoft built the Hogan Discovery Interface to enable IBM ADDI to work with Hogan applications. Also, we’re looking to enable more robust shift left testing with IBM z/OS Automated Unit Testing Framework (zUnit) and IBM Z Virtual Testing platform
Modernize the core: The IBM z/OS Connect Enterprise Edition provides the ability to quickly build and deploy system of records APIs. In addition to using IBM z/OS Connect, Luxoft also developed an infrastructure so the Hogan application could build the necessary components for APIs on mainframe. Event-driven architecture for Hogan applications using IBM Z Digital Integration Hub (zDIH) is also in flight. This will enable real-time data extractions and publishing capabilities from Hogan applications
Transform the core: Luxoft is working with IBM and other partners to create a componentized view of core applications. This is in line with the principles and guidelines of the Banking Industry Architecture Network (BIAN). Externalized features and functions can be deployed at an enterprise level using IBM Z hybrid cloud or IBM Red Hat OpenShift on IBM Z and LinuxONE
To learn more about how Luxoft can help you modernize in place, contact email@example.com
Chief Technologist at Luxoft Banking
Arun Sharma is Chief Technologist at Luxoft Banking. He is responsible for DXC’s Core Banking application which is used by more than 40 tier–1 banks, globally. He has a keen interest in digital transformation and has been working across Luxoft’s worldwide customer community to shape the digital transformation strategy for core banking. Arun has more than 25 years’ experience in the banking and financial services industry, and enjoys a hands-on role in technology planning, prototyping and implementation. He also leads Luxoft’s BIAN organization and is involved with key BIAN initiatives for 2021.