Drivers for SOA in the Transaction Banking Domain

Sriram Anand,

Principal Researcher

Web Services Center of Excellence,

Infosys Technologies, Ltd.

Jayakumar Venkataraman

Principal Consultant

Banking Domain Competency Group,

Infosys Technologies, Ltd.

Abstract In a competitive business landscape, banks are under pressure to innovate, improvise and differentiate their products

and services while continuing to reduce the time-to-market for new product introductions. The rise of new

businesses and newer ways of doing existing businesses has significantly influenced the need for a better assessment

of the business value realized from the IT investments. Client Relationship managers, Product managers etc are

facing the need to be innovative and flexible in their offerings to the client and they demand an agile delivery

infrastructure (process & IT) to support them in this regard. In banks operating multiple lines of businesses,

generating a Single view of the customer is a critical both from a marketing perspective as well as Risk Management

perspective.

For a CIO buffeted with such varied demands, the search is on for a solution that can help him address these

demands. The problems facing the CIO typically are:

a) Integration – How to integrate the gamut of legacy systems & modern technologies; packaged

applications to custom built systems and multiple internal / external stakeholders.

b) Future proofing IT Investments – How to ensure that IT investments of today will continue to be

relevant and useful in the coming years

c) Agility of IT infrastructure – How to transform the current ponderous IT infrastructure to an agile

infrastructure in sync with business demands for flexibility

Therefore, keeping in mind the business and technology requirements in this domain, SOA may be appropriate

given some sample business drivers such as:

• Cross-Border Cash Management: Most global banks offer global cash management solutions that involve cross-

border payments and receipts for their corporate customers.

• Globalization of Cash Management Functions: Banks have embarked on centralizing their global cash

management operations into a few regional processing centers located strategically in various locations to

provide round the clock transaction processing capability.

• Time to market for new products: Banks are constantly looking for ways to innovate on their cash management

offerings and reduce time to market for new products by leveraging existing infrastructure.

• Reduced redundancy in IT infrastructure: By promoting common IT functionality available as a service to be

accessed by multiple applications across LOBs, geographies, and external partners, there is a significant cost

saving.

• Straight Through Processing (STP): The need for STP in cash management has been highlighted keeping in

view the need to reduce duplicate data entry, manual handoffs between activities in cash management

processes, to reduce errors in data handling, and to increase the end-to-end automation of business processes.

• Unified View of data: The need for accurate, real-time information from various information sources is essential

for regulatory compliance and to provide a unified view of information (e.g. customer).

• Multi-Channel capabilities: Driven by the exploding market for cell phones and PDAs especially in developing

countries, multi-channel information architecture is imperative for today’s anytime anywhere banking

requirements.

Given these drivers, it is imperative to develop a comprehensive SOA strategy for the banking domain that is driven

by the business process and can provide flexibility, open standards and loose coupling. This presentation covers the

specific applicability of a service based model to the transaction banking space and prescribes reference architecture

for this domain.

Keywords

IEEE International Conference on Services Computing (SCC'06)0-7695-2670-5/06 $20.00 © 2006

Service-Oriented Architecture (SOA), Transaction Banking, Legacy System Integration, Globalization, Web

Services, One View of Customer Data.

About the authors

Sriram Anand is a Principal Researcher at Infosys Technologies, Bangalore. Prior to joining Infosys, Sriram worked

in IT consulting as well as product engineering in the US for over 12 years. His interests include enterprise

architecture, service-oriented architecture, and legacy integration and software engineering methodologies. Sriram is

experienced in designing enterprise architectural strategy for leading U.S. companies in the financial services, retail

and pharmaceutical domains. Sriram holds a Bachelor’s degree from IIT-Madras with a Ph. D. from SUNY-Buffalo,

USA.

Jayakumar Venkataraman is a Principal Consultant with the Banking Domain Competency Group at Infosys

Technologies Ltd. He has over 12 years of experience in the banking and IT industry. Mr. Venkataraman has

worked in Citibank, American Express Bank and BNP Paribas in the areas of Commercial and Transaction banking.

At Infosys, Mr. Venkataraman focuses his research work on Basel II, Risk Management and SOA implementation

issues in the banking industry. Mr. Venkataraman has published a number of articles in reputed journals and has

participated as a speaker at international conferences.

IEEE International Conference on Services Computing (SCC'06)0-7695-2670-5/06 $20.00 © 2006