Busy?
Well, just take a breather for a moment and consider this. Isn’t cloud working amazing?
We take so much technology for granted these days, but when you stop and think how far banking has come in a relatively short time, it kind of makes your hair stand on end. I mean, even core deposit, loan systems and other complex workloads are located in the public cloud.
The potential is astonishing, as long as you’re technologically up to speed and capable of taking full value, that is. However, the cloud’s not fit for every purpose; not every infrastructural component suits migration. And a single-vendor or cloud-only strategy could easily miss the mark for your most crucial systems and processes.
How did things get so complicated?
Looking back, having everything on-prem was a breeze. But adding a cloud model (likely multivendor and multicloud) with third-party specialist services providers and increasing functionality at the edge into the mix, turned the whole environment into a virtual jigsaw puzzle with no lid.
The reality of coping with this scale of complexity could persuade banks to choose cloud-only simplification, which is a bit like taking a sledgehammer to crack a rather delicate nut. The most logical answer is to adopt a “fit for purpose” strategy and use the best tool for each job. It’s much more productive to support your business goals, resolving individual system and process challenges as you go while taking the firm’s technological maturity, essential response times, regulatory demands and markets into consideration.
Fit-for-purpose benefits
Maintaining a fit-for-purpose strategy allows the bank to flex operationally to match growing customer expectations, compliance commitments, market disruption, innovation and the need for exceptional speed by capitalizing on cloud developments. That said, heritage technologies and platforms still have their place in a modern setup, and financial institutions need to acknowledge their strengths and domain suitability. After all, you're conducting business on an assurance platform, so shouldn’t your primary focus be safety, certainty and simplicity rather than the tunnel vision of speed and convenience?
Customers will be extremely unhappy if crucial data goes walkabout or they can't get at their cash.
Understandably, decision-makers can be nervous about leaving workloads on the bank’s mainframe, considering:
- The bank probably doesn’t have enough developers with legacy or cloud migration skills
- Migration and app refactoring costs can be prohibitive
- The low latency requirements of specific applications
- Having to negotiate sovereign regs for specific types of data
It’s all in the interpretation, though. Coming at it from another angle, those migration challenges also highlight the benefits of maintaining established data centers and vintage programming languages. For instance, COBOL still underwrites 80% of in-person financial services transactions, manages 95% of all ATM activities and processes US$3 trillion of daily commerce. Over 220 billion lines of code and 1.5 billion more are written annually. In addition, its matchless stability and processing power enable COBOL to ensure banks maintain apps and programs in existing architectures.
Certain institutions, such as IBM and other third-party providers, are addressing the skill shortage by educating a new generation of COBOL engineers. Academies are flourishing and deliver an added benefit — a hybrid cloud environment helps firms attract/retain future developers with the promise of working across both mainframes and the latest cloud-native technologies.
Mainframe hybrid cloud solution
In the olden days, cloud was regarded as the mainframe’s successor, replacing the core banking systems that keep the world’s largest organizations running. But around a decade or so ago, banks began reassessing the value of their mainframes, recognizing their importance in maintaining compliance, security, resiliency and performance. Accordingly, decision-makers reinstated mainframe investment, building plans for modernization around a mainframe hybrid cloud strategy.
Ultra-secure mainframes traditionally provide superior availability and transactional management. Now, they also accommodate microservices-based workloads, IoT, AI/ML, the latest development tools and agile development practices.
Are you wary of migrating everything in one, all-or-nothing hit? APIs, microservices and containers allow banks to detach the business logic and move core system elements to other platforms (e.g., cloud), leaving the most critical core functions (transaction processing, customer data, general ledger, etc.) on the mainframe.
Building a working party
Ensuring that mainframe-based platforms continue to provide secure, robust and scalable operations for the bank is essential. Therefore, banks must develop partnerships to help mitigate the lack of skilled staff needed to maintain the infrastructure.
Potential partners must understand key banking practices (e.g., resilience, data discretion, compliance, output and expandability) and the intricacies of mainframe development. But the right partner will also have wide-ranging expertise in digital infrastructure, as the technologies must be perfectly aligned to preserve the finer points that banks require.
DXC Luxoft is the ideal partner
With over four decades of experience developing bespoke software for banking, wealth management, lending, payments and core modernization, we specialize in supporting banks on their digital transformation journey. That includes operating applications in the following three areas:
- Mainframe within data centers
- Private cloud for COBOL development
- Public cloud for customer-facing apps
Our holistic approach covers in-house, mainframe, mainframe hybrid cloud, SaaS and IT/business process services. We also provide a managed services offering comprising end-to-end support and maintenance for banking applications, infrastructure and platforms, allowing clients to streamline operations and save money into the bargain.
DXC Luxoft concentrates on creating and deploying bespoke solutions together with its partner ecosystem. This practical alliance enables firms to attain business goals and establish/strengthen a banking innovation leadership position.
Crucially, given the ongoing dependence on dedicated data centers, we’re also the creators and custodians of Hogan, a core banking platform used by many of the world’s largest banks.
Hogan shields your sensitive data
As a processor and system of record, DXC Luxoft’s Hogan core banking platform is the driving force behind some of the world’s most influential banks. Over 40 banks and card processors use Hogan as their primary core banking modernization application. Today, that means processing over $5 trillion in deposits, which makes it one of the largest core banking systems in the world.
Hogan mainframe hybrid cloud allows institutions to secure sensitive data in a fully customizable private cloud infrastructure, moving less-sensitive assets to one or more highly versatile, low-cost public cloud resources. This conceals complexity and allows banks to react faster to market threats and opportunities.
And the combination of Hogan and IBM z16, with its robust data-processing capabilities and enhanced security features like fully homomorphic encryption, enables banks to protect data, ensure compliance and improve the customer experience through faster, frictionless processes.
Let’s get together on this
However, the successful adoption of a mainframe hybrid cloud banking solution isn’t just about the technology; it’s about achieving business goals enabled through a technology partnership. It also relies on the collaboration and guidance we provide throughout the journey. Here are four prime elements that make a strategy effective:
- Customized solutions: By partnering with banks individually, we can tailor Hogan x to their unique needs, ensuring a seamless fit with their existing infrastructure and future goals
- Expert guidance: We act more like a trusted advisor than a simple vendor. DXC Luxoft and IBM experts guide banks through the complexities of migration and platform selection, helping them make better-informed decisions
- End-to-end support: Hogan offers comprehensive support from pre-implementation consultation to post-implementation support. We march alongside our clients throughout the transformation journey
- Relationship building: Building long-term relationships with our banking partners fosters trust and confidence in Hogan. This approach aligns with our portfolio’s core purpose, emphasizing partnership and empowerment
- Value-driven results: Solution-centric partnering ensures that banks buy into our technology and derive maximum value from it. We focus on delivering results that positively impact our clients’ operational efficiency, agility and competitiveness
Make your bank more resilient
DXC Luxoft is a trusted provider of change, modernization and operational services for banking and capital markets. By partnering with market-leading tech companies, DXC Luxoft expands its innovative services, technologies and talent ecosystem, enhancing customer relationship management and empowering clients to achieve better business outcomes.
We regard cloud migration and progressive, mainframe-based, core-application modernization as two sides of the same transformational coin. DXC Luxoft develops and invests in talented people who keep the on-premises infrastructure operationally resilient, maintaining the core and innovating around it. Our experts possess the right skills and experience in Hogan core banking applications to control and modernize this vital part of client architecture.
Clearly, banks will be running traditional platforms (core or otherwise) for a while yet. And, in addition to system maintenance, legacy system innovation will remain central to business agility. We’re perfectly placed to support and innovate safely and securely, avoiding the risks that accompany wholesale modernization and cloud migration.
Go deeper
For further insights into how DXC Luxoft can help you create a fit-for-purpose infrastructure for critical workloads and seamlessly harness the power of mainframe hybrid cloud technology, contact our experts.
