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SOA - a 'playlist' experience for financial services

I have written at length in the past about the growing importance of flexibility and efficiency in banking IT systems.  As competition from emerging markets grows with the rising powers of Asian banks, combined with the increasing pressure from regulators, now, more than ever, European and North American banks need to be top of their game.

It is well recognised that only the most up-to-date IT systems can provide the agility needed for banks to respond to the challenges of this current economic climate.  So how can banks go about maintaining their systems without undergoing the costly and lengthy IT projects associated with core renewal projects?

One solution gaining increasing popularity amongst enterprise architects is that of service-oriented architecture.  The use of SOA allows the offering of a catalogue of ‘building block’ business functionalities, allowing non-technical business users to pick and choose existing functionalities, enabling them to then build new products. 

In this way, SOA is to enterprise architecture what the iTunes playlist is to music.  iTunes allow users to pick songs and build playlists, without the arduous process of manually changing CDs.  Users can listen to any sequence of songs, in as many different playlists as they wish.  Users can create and choose any playlist for a range of situations – jogging, cleaning, commuting.  SOA catalogues apply the same principle to business processes, allowing for the reuse of business functions in any manner of products and services. Being able to effortlessly line up an additional component into a banking process empowers the business user by dramatically reducing the IT skills and time needed.

The current business environment is fast-paced and unpredictable.  It is near-impossible to second guess the future needs of a business.  But with SOA capability, businesses can build new and innovative products, responding quickly and appropriately to external pressures, maintaining a competitive edge.  On top of all this, the adoption of SOA will ensure interoperability, whereby different IT systems within a bank can work together as seamlessly as possible, without additional time or cost requirements for integration, allowing a resultant cost advantage over competitors. 

You would be unlikely to choose an outdated CD player over an iPod, so why settle for an outdated enterprise model?


Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 02 August, 2012, 15:20Be the first to give this comment the thumbs up 0 likes

While the need for flexibility and agility in banking applications is clear, drawing an analogy between Enterprise SOA and iTunes is oversimplifying the situation: In a playlist, each song can be placed anywhere in relation to another and doesn't have to be integrated with the other songs. Unfortunately, business workflows don't work that way - I shudder to think of the consequences for a bank if an an iTunes-inspired solutions architect decided to place the credit check and sanctions screening objects at the end of a fund transfer transaction and didn't think it necessary to integrate either of them with the payment release object. IMO, it is due to the complexities of interdependence and integration that, let alone SOA, even hub-and-spoke integration architecture has barely gained traction in banking landscapes, with hundreds of point-to-point interfaces still reigning supreme.

Darren Negraeff
Darren Negraeff - Zafin - Vancouver 03 August, 2012, 17:40Be the first to give this comment the thumbs up 0 likes

Great article Hans. I really like the metaphor as SOA is not an easy thing to explain to those who don't know it and have no reference point.

I agree with you - the enterprise model will become a thing of the past and interoperable services the way of the future. This is true in many industries but particularly timely in banking. We're seeing a lot of activity as customers and prospects are beginning to demand SOA to replace or create new functionality in legacy core environments.

Thanks for sharing!

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