Computerworld banking-on-the-mainframe

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Overview of Banking and Mainframe

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Computerworld banking-on-the-mainframe

  1. 1. 2/23/2012 1 © 2012 IBM Corporation IBM Business Process Management 1 2012 … Key trends we are seeing in banking IT solution architecture  Limited success in re-hosting mainframe applications due to risk and cost (versus “claims”)  Banks are tired of “open system” banter – many vendors are not “open” (nor close to it)  Banks pursuing replacement with ISV solutions and/or enhancing existing applications – Interoperability with existing assets and extensibility (mobile, social, multi-channel) – Transformation of existing solutions to support flexible, extensible and manageable solutions  Focus on layered architectures to support adaptable functions balancing cost and risk – Use of Business Process Management to support orchestration of existing solutions – Use of Business Rules and Decision Management to externalize decision points from applications © 2012 IBM Corporation IBM Business Process Management 2  70% of corporate data  75% of the business logic that corporations run on today  30 billion transactions/day valued at over $1 trillion/week  213 million messages per day on z/OS in the banking industry alone  $5 trillion of core System Z applications with estimated replacement costs of $20 trillion Contrary to “popular” belief – The mainframe continues to be the foundation for banking worldwide ….
  2. 2. 2/23/2012 2 © 2012 IBM Corporation IBM Business Process Management 3 Evolution of Banking Applications “Green screen” 3270/VT Time Functionality Monolithic/”Legacy” Hybrid COBOL/PL1 application “Green Screen” and custom interfaces Messaging (MQ) Multichannel Interfaces (Java, Social, Mobile) Business Services (BPM/BRMS/Other) COBOL/PL1 application Middleware (ESB, JMS,JEE, WMQ) COBOL/PL1/Java application DBMS IMS/DB2/VSAM DBMS IMS/DB2/VSAM DBMS IMS/DB2/Other Layered Architecture 1980 1990 2000 2010 © 2012 IBM Corporation IBM Business Process Management 4 A Representative Banking Environment
  3. 3. 2/23/2012 3 © 2012 IBM Corporation IBM Business Process Management 5 CICSCICSCICSCICS IMSIMSIMSIMS WASWASWASWAS Executive Management Customer Service Risk Management & Fraud Detection Teams Finance and Ops Account Administration 2 5 4 CustomerCustomer CareCare CustomerCustomer CareCare DepositsDeposits LoansLoans CreditCardsCreditCards DepositsDeposits LoansLoans CreditCardsCreditCards CoreSystemsCoreSystemsCoreSystemsCoreSystems Campaign&Campaign& CaseCase ManagementManagement Campaign&Campaign& CaseCase ManagementManagement 1 3 6 1) “Customer initiates Account Opening“ 2) “Account Opening Service retrieves customer/product data from repositories” 3) “Assess financial risk associated with the customer for this account” 4) “Customer Care process is triggered so that the bank staff can make the right decisions” 5) “Account is created in the Product Processor” 6) “Account information returned to the customer” Traditional Process Management in Banking © 2012 IBM Corporation IBM Business Process Management 6 CICSCICSCICSCICS IMSIMSIMSIMS WASWASWASWAS Executive Management Customer Service Risk Management Teams Finance and Ops Account Administration Customer Benefits:  Ease of z/OS assets reuse  Reduction in manual work & errors  Optimization of z/OS resources  Faster/consistent issue resolution  Enhanced usage of process  Easier to manage the business  Process integrity & stability 1) Automated workflow/decision making 2) Reduce errors/improve consistency 3) Leverage existing systems/data 4) Monitor for events/initiate actions 5) Real-time visibility/process control BPM Enables Asset Reuse and Future Adaptability of Solutions
  4. 4. 2/23/2012 4 © 2012 IBM Corporation IBM Business Process Management 7 Enhancing/Extending Mainframe Assets with BPM Design and deploy business processes that interact with CICS, IMS, VSAM and DB2 zOS resources:  Long-running workflow processes with DB2 z/OS  Straight-thru (integration-centric) processes with CICS, IMS, DB2  New Web-based UI for business users front-ending WPS for z/OS and CICS  High Availability, Global Operations, Disaster Recovery and Backup  Significant workloads - 100 – 10,000 users BPM on System z Reports / Analytics Business Modeler Graphical Implementation User Portal / Forms © 2012 IBM Corporation IBM Business Process Management 8  Unified BPM platform for Windows, AIX, Linux and zEnterprise  zOS version leverages co-location with IBM System Z programs for superior performance, scalability, and access to data  zOS version enables high volume process automation with greater availability and qualities of service IBM Business Process Manager V7.5 for z/OS highlights  Built-in SOA components for extensive enterprise-wide service integration and orchestration  Full compatibility with the latest version of IBM WebSphere Process Server for z/OS  Flexible deployment of process applications originally created with IBM WebSphere Lombardi Edition for Linux on System Z or other platforms  In-process rules authoring based-on WebSphere ILOG JRules technology  Streamlined installation and configuration of BPM within IBM WebSphereApplication Server on z/OS IBM Business Process Manager
  5. 5. 2/23/2012 5 © 2012 IBM Corporation IBM Business Process Management 9 Real Results zEnterprise allows multi-tier application integration Automatically prioritizes and routes work Monitors critical business events and initiates actions Unmatched scalability and 85%-100% utilization Client Pains  Inflexible systems inhibit responsiveness  Difficult to reuse existing business logic  Development backlog with change management  Siloed resources prevent sharing  Lack of integration  Platform/language specific skill sets  Limited sharing and reuse of assets BPM and the Mainframe – A Client Example US-based multi-national bank turned to IBM to implement a new IT solution to automate and integrate data-driven processes © 2012 IBM Corporation IBM Business Process Management 10 Traditional Decision Management (DM) in Banking Challenges for a Change Request • Changes are costly, resource & time- intensive • Rules and events are hidden in code (COBOL/PL1) • Most changes require programming costly • Lack of consistency • No central management of rules/events • No reuse of rules/events • Limited ability to audit and govern assets • Gap between business analysts & IT administrators • Lack of business-oriented vocabulary • Limited tools to support business users • Rules/event knowledge fades over time • Limited ability to test and simulate • Difficult to localize for different geos Spreadsheets Databases Manual Processes Monolithic Applications Mainframe Can get quite large Are scattered everywhere Are subject to change 01 TRANSACTION-MSTR-FLE. 03 TRNS-CNBR-ASGND PIC 9(10). 03 TRNS-CACCT-CD PIC 9(5). 03 TRNS-AGE PIC 999. 03 TRNS-ST PIC XX. 03 CUST-STATUS PIC XX. 03 CUST-AVAIL-CRSC PIC 9999. 03 CUST-ASK-AMT PIC 9(8)V99. 03 TRNS-ADDR. 05 LINE1 PIC X(25) 05 LINE2 PIC X(25). 05 LINE3 PIC X(25). 03 CUST-INFO OCCURS 5 TIMES. 05 MSG-LINE1 PIC X(30). 05 MSG-LINE2 PIC X(30).
  6. 6. 2/23/2012 6 © 2012 IBM Corporation IBM Business Process Management 11 Decision Management System Rules/Events are monitored & managed Rules/Events are deployed & executed Rules/Events are extracted & stored Decision Management (DM) Enables Adaptable Solutions Spreadsheets Databases Manual Processes Monolithic Applications Mainframe Repository User Tools Engine © 2012 IBM Corporation IBM Business Process Management 12 WebSphere Decision Server BusinessDecisions Versioning & Governance of Decision Logic @ Call Center Internet Agency Decide Act IBM WebSphere Operational Decision Manager v 4.3v 4.3 ---------- ------ ------ v 4.4v 4.4 ---------- ------ ------ v 4.5v 4.5 ---------- ------ ------ v 1.0v 1.0 ---------- ------ ------ v 1.1v 1.1 ---------- ------ ------ v 1.2v 1.2 ---------- ------ ------ Detect Pattern Identification 2 web quote requests & 1 direct contact in 3 days: Trigger agent call back to assist in loan origination Same name with different addresses on call-in & web request: Trigger inquiry Has Mortgage Propose new loan terms Existing Customer: Offer 5% discount Add Zipcode: Determine home value Win Linux AIX zOS WebSphere Decision Center Decision Management (DM): Business Rules and Business Events
  7. 7. 2/23/2012 7 © 2012 IBM Corporation IBM Business Process Management 13 Rule Development and Management Rule Deployment Rule Designer Application Developer, Architect Business Analyst, Business Manager Development Rule Management Decision Center Rule Execution Server on WAS for zOS Decision Center Repository zRule Execution Server for zOS COBOL code Generation COBOL Management WebSphere Decision Server for zOS: Execution Options © 2012 IBM Corporation IBM Business Process Management 14 • Create an BRMS-based cross-sell/up-sell solution to provide decision support throughout generation of personalized & qualified offers • Rules centralized and deployed Cross-channel (branches, call centers, etc.) and cross-product • Agile solution – business users implement and deploy changes when required Challenge •Improved client relationship – acquisition, retention & wallet-share •Accelerated ROI • Increased revenues - $14M in approved bookings in 2.5 months • Significantly increased cross-sell offers: from 13% to 40% • Significantly increased client offer acceptance from 3% to 20%-30% •Instant updates of rules fully managed by business users – changes are implemented with greater accuracy and speed Solution • The company was missing revenue by not being able to present the right offer at the right time when a customer was on-line • Decision logic was scattered and inconsistent across channels • Poor customer experience: branch staff would sometimes try to cross-sell to clients who did not qualify for the additional credit, resulting in negative client experience One of the World’s Largest Financial Service Providers Dramatically Increases Revenue through effective Cross-sell/Upsell Business Benefits Decision Management and the Mainframe – A Client Example
  8. 8. 2/23/2012 8 © 2012 IBM Corporation IBM Business Process Management 15 Collocated Applications on the Mainframe  Reduced security overheads eliminates need for encryption/SSL  Easier management of workloads  Enables multiple security options  Extremely high throughput as RRS provides more efficient transaction syncpoint coordination over XA  Reduced complexity with fewer points of failure, fewer monitoring points and reduce overall time to resolution $5.36 $3.15 NOW: $2.18 BEFORE: $8.82 -39% -41% -30% zAAP/zIIP Sub-capacity Pricing Z196 and Integrated Workload Pricing WAS/DB2 in General Purpose Engines © 2012 IBM Corporation IBM Business Process Management 16 Summary  Customers expect banks to innovate without compromising application resiliency/performance  Banks continue to view mainframes as a key platform alternative for applications/middleware  Banks are adopting layered architectures building on current IT solutions on mainframes to provide cost management and to reduce the risk involved in system replacement/rehosting  A layered approach enables rapid implementation in response to internal/external requirements  BPM and DM layers enhance/augment existing solutions while preserving mainframe QoS  Layered architectures enable multi-channel solutions which interact with business services
  9. 9. 2/23/2012 9 © 2012 IBM Corporation IBM Business Process Management 17 References  Modernizing Core Banking Systems http://www.ibm.com/developerworks/websphere/techjournal/0809_col_simmons/0809_col_simmons.html  Evolving approaches for connectivity and core banking systems http://www.ibm.com/developerworks/websphere/techjournal/0907_col_simmons/0907_col_simmons.html  Core banking transformation worst practices and other scary stories http://www.ibm.com/developerworks/websphere/techjournal/1008_col_simmons/1008_col_simmons.html  IBM Smarter Banking http://www-01.ibm.com/software/industry/banking/  Combining Business Process Management and Enterprise Architecture for Better Business Outcomes http://www.redbooks.ibm.com/abstracts/sg247947.html

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