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Pursuing the Promise of SOA

Though service-oriented architectures have the potential to improve IT integration and business agility, the lack of standards is hindering widespread adoption of the strategy in banking. But that's not stopping some institutions from pursuing the promise of SOA.

The Emergence of Standards

The business-specific content of these vendor offerings, Narter suggests, will help financial institutions see the value of SOA. But more important, he points out, is that off-the-shelf SOA solutions can provide the basis for standardization.

For instance, many of the available frameworks offer a standard definition of a customer, helping banks identify customers across their many disparate systems, Narter adds. That normalization is the beginning of standardization across the bank and increases the effectiveness of shared services across the enterprise.

Vendors aren't alone in pursuing standards. Industry groups and even individual banks are working to develop data and interoperability standards, as well.

"IBM started it with IFW for financial services," Narter says, referring to the Armonk, N.Y.-based company's Information FrameWork, a group of data, process and object models developed to help financial institutions transform cross-enterprise architectures. New York-based Accenture also offers an SOA standard, known as the High Performance Bank Framework. And the Wakefield, Mass.-based Interactive Financial Exchange (IFX) Forum, which was started about 10 years ago, is a neutral industry group that promotes an open, interoperable standard for financial data exchange designed to meet the business requirements of the global financial services industry.

In addition, in April, Walldorf, Germany-based SAP and Microsoft (Redmond, Wash.) announced the formation of the Banking Industry Architecture Network (BIAN), whose stated mission is to help banks establish an SOA for their business operations. "There has been a lack of pervasive adoption of vertical industry protocol," claims Brian Jackson, Microsoft banking technology strategist for worldwide financial services, who was recently appointed the head of architecture for BIAN, which emerged out of SAP's Industry Value Network (IVN). While horizontal standards have matured and there have been some bright spots for vertical industry standards, such as payments, the banking industry is "far from having a wide array of interoperability" that would enable SOA, Jackson contends.

According to Jackson, BIAN is working closely with banks to develop a method for sharing data and to establish a widely accepted nonproprietary standard for the industry. "We are not trying to reinvent the wheel as far as standards with BIAN," he says. "We are open to working with and supporting adoption of existing standards."

Cynthia von Hollen, principal, financial services industry, SAP, says SAP developed IVN in late 2005 because nine large banks approached the vendor seeking standards for their services architecture. "When it's a non-core competency, [banks] would rather have a dialogue about the best way to define those standards," she says. While IVN began that dialogue, BIAN is intended to open the discussion to the entire industry.

"I am very hopeful that this will be an industry standard, but I know that it isn't going to happen overnight," von Hollen says. "What will drive that will be the banks, not the vendors."

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