See related sidebar: BIAN Provides Standards to Promote SOA Adoption
As the banking industry continues to navigate a recessionary economy, financial institutions are learning that they cannot sustain cost-effective operations or superior customer service using disparate platforms and siloed databases. A move toward more-open, flexible and even emerging platforms is not only saving banks capital but also offering organizations an agility that will keep them competitive once the economy turns around.
Even while the financial crisis continues to strain banks' technology budgets, they must maintain efficient and secure transaction processing, real-time customer interactions and business continuity -- all while continuing to pursue growth. Clearly this is not easy as "Many companies are simply trying to stay afloat during the recession," says Richard Daukant, VP and general manager, financial services, SAP (Newtown Square, Pa.). "However," Daukant adds, "the current economy is presenting a great opportunity for banks to position themselves for the future. The way to do so is to consider transitioning to more-flexible operating platforms."
Though some banks may not believe they have the funds now for an architectural overhaul, Daukant contends that they should begin to take stock of the complexity of their data storage configurations and business applications. Mergers and acquisitions have run rampant over the past decade, he notes, and thus many institutions are operating disparate software applications or, worse, disparate business channels.
"The biggest challenge we hear daily is that internal systems, either organically grown applications or those acquired through mergers, just don't 'talk' to each other," reports Daukant. "This causes issues, including not being able to bring new products to market in a timely manner or, worse, inability to present them across business channels."
SOA for Built-In Flexibility
To combat these challenges, experts are urging banks to consider flexible platforms that support end-to-end business processes and to utilize a single set of information and reusable applications. Enter: service-oriented architecture.
SOA provides an interoperable, scalable platform with loosely coupled applications. The open platform ensures that applications, which are accessible over the network, can be reused across the enterprise for various operations.
"The architecture promotes flexibility and solves how to integrate today's siloed applications," Daukant asserts. "Since it supports the interoperability of new and existing applications, and keeps users in touch with information and processes in real time, it provides a low total cost of ownership."