Integration Is Key
Of course, better systems integration is a basic tenet of SOA and key to realizing many of the benefits, including increased speed to market, that the architectural approach offers. "There's a real desire for market speed and cost effectiveness, [which is] driving reuse of existing services through SOA," says Chae An, VP, software group for the financial sector solution unit of IBM.
For example, Charlotte-based Wachovia ($666 billion in assets), which turned to IBM for help designing an SOA for its payments business, dramatically decreased the amount of time required for testing new products, according to An. Prior to the re-architecture, the bank faced obstacles in its testing because of rigid interfaces between its payments channels, he relates. "Now they can test just once," An says.
As a result of its SOA implementation, Wachovia has seen a 50 percent reduction in terms of time to market, as well as cost reduction when modifying, upgrading or adding a new payments interface, An says. This kind of speed and savings is increasingly important in the payments space as the business becomes more and more commoditized, he notes.
Like Celent's Narter, An points out that the integration opportunities facilitated by SOA also provide more flexibility to banks' existing core systems. Phasing in new capabilities through SOA extends the life of banks' core systems, he says, and this "progressive transformation" mitigates the risks of a core system rip and replace.