Core Banking System (CBS) Redesign Program for a Systemic Bank
Financial institutions to remain sustainable and strive should embrace and adapt to new technologies, modernize existing applications, and adjust business models to provide competitive services to customers. Here's a great story about how a monolithic core banking system turned into a flexible and dynamic business tool.
The Systemic Bank is one of the leading Groups of the financial sector in Greece with more than 300 branch offices and subsidiaries in 4 countries offering a wide range of high-quality financial products and services in both the domestic and international market; it has one of the highest capital adequacy ratios in Europe.
In today's rapidly changing technological environment, financial institutions need to be agile and adaptive in order to remain competitive. The institution, having foreseen these needs, decided to undertake the digital transformation of its core banking system. In order for any core banking, digital transformation project to succeed, a fundamental building block is Product and Service Management. The former Core Banking System relied on Cobol monolithic transaction programs executed by branch users and running on mainframe. Parts of the source code could be traced back in decades. For the Bank, the former Core Banking System was not easily maintained and had become a limiting factor for its business agility.
The implemented solution was based on the following pillars:
- Modernization of the mainframe system, while keeping the existing data models intact, i.e. no data migration. The modernization included the componentization of big, monolithic mainframe programs into smaller, atomic and reusable components and the extraction of enterprise-wide business logic into a centralized repository for common use. Furthermore, static data such as reference data, master data and product data were mined and consolidated in cross-product configuration applications.
- Introduction of an integration hub that acted as a glue for all business requests and provided a common methodology for the integration of the various bank applications and systems. Several new capabilities were provided to the Bank, such as a Business Rules Management System to manage and implement enterprise-wide business logic and a Business Process Management System to manage and implement workflows and business processes.
- Introduction of enterprise-wide components, with the adoption of Uni Systems own Product Studio solution and Reference/Master Data management products.
- Identification and Realisation of Common Horizontal Enterprise Services (such as Authorisation, Approvals, Journaling, e-slip printing etc.)
- Introduction of the tools and methodologies adopted for the needs of the Bank, including:
- Uni Systems code analysis tools and analysis methodologies.
- Uni Systems design methodology to (re)design the new business flows.
- DevOps tools and practices to increase productivity, release with confidence and minimize cycle times.
- Uni Systems Services and Tools for testing.
The project was implemented using an Agile development approach and was delivered within the time frame set from the business stakeholders. During the project implementation the legacy code was analyzed (using TOTEM), the product characteristics were identified and removed from the code and passed onto Product Studio as product attributes. Upon completing the code inspection, all product attributes were grouped into product templates and from there onwards were transformed into business products as they are seen on the banks official web site. The banks newly developed core banking system uses Product Studio as one of its core systems for Product Definition and Management.
Benefits of solution implementation approach:
- Progressive approach with lower risk, easy to demonstrate progress and enable a steady stream of ROI.
- Prioritized functional areas and components, leading to minimal disruption to the business.
- Short-term decisions that did not increase the overall complexity of the program.
Benefits in relation to functional coverage, time to market and self-serving business users:
- The solution consolidated and centralized the common and reusable business logic, thus leading to faster time to market and better maintenance and evolution of the applications.
- The employment of a business process management improved business agility.
- The integration hub homogenized the communication between the systems and eased support for change in business models.
- The creation of new products through the Product Studio application. The application covered a wide range of processes, such as product envisioning, design and fast product launch, thus providing a solid foundation for product definition and management. Through the system the bank had the ability to define attributes, products, rules and group them according to desired business needs and requirements.
- An event registry was adjusted for the needs of the bank to provide for the definition and parameterization of events and their corresponding behavior – mainly concerning the horizontal elements defined such as the journal requirements, the e-slip elements, business logic encapsulated in business rules, and more.
- Maintain, update and create new business rules through a user-friendly web ui. A central repository hosted the business rules and a rules registry was designed for fast reference. The business rules were wrapped in rule services that were core, central components in the bank enterprise architecture, available for all systems and applications in the IT landscape.
- Reference data and master data were centrally managed thus allowing for central maintenance and single-point, parametric evolution.
The CBS Redesign Program was granted the ΙMPACT ΒΙΤΕ (Business IT Excellence) Golden Award 2019 in the category of Large Scale IT Projects for Business Applications.