SOA in Banking

November 17, 2008

Great Expectations Can SOA Deliver?Bart Narter Orlando, Florida

A member of the Oliver Wyman Group

CONFIDENTIAL | www.oliverwyman.comDocument number

Great Expectations: Can SOA Deliver?

Agenda What is SOA? Technical details What does it do for me? How do I deploy it?

2008 Oliver Wyman www.oliverwyman.com

Document number

2

What is SOA?

Loosely coupled modular services to support both business and IT requirements.

So what does that mean?


Document number

3

Loosely coupled

Services are independent. They dont know or care whether the service is: Running on Windows, J2EE or a Mainframe Written in assembler, C, Java, or COBOL. Running on a machine in the U.S., India, or China Being served by a CRM system, a DDA system, or a database So what does that do for me? Enables a myriad of different (legacy) systems to supply information in a consistent way using SOA.


Document number

4

Modular Services are no longer monolithic applications, but broken into compound and granular services. Example: Initiating a transfer is a compound service, that might comprise the following granular services: Find customer Authenticate customer Find all accounts and balances (for display) Find account (the funding account) Get account balance (to verify availability of funds) Find account (the receiving account) Debit account (the funding account) Credit account (the receiving account) Find all accounts and balances (for re-display)


Document number

5

So what does modular do for me?

Note that in the previous example we reused a number of services within the compound service. Other compound services will reuse these services as well, driving consistency (= lower risk), lower cost, and flexibility.


Document number

6

SOA is an IT architecture consisting of loosely coupled modular services to support both business and IT requirements.

Loosely coupled: runs on a myriad of applications, systems, platforms and locations to tie together new and legacy systems Modular: broken into compound and granular services to enable reuse Business and IT: across the entire organization.


Document number

7

SOA from a technical viewpoint

Today SOA is used to broadly define a set of products and services that range from data conversion services, to portal tools, which is why it is very difficult to answer the question, Do you use SOA? A map of SOA components on the next slide should clarify.


Document number

8




Document number

9

A Map of SOA Components

Web Portals

Registry and Repository

Manage and monitor

Human Business Process Management (BPM) Enterprise Service Bus (ESB) Data Services Process Services Business Logic Orchestration System BPM

Security

Databases

Systems of Record


Document number

10

Design SOA

Portal Design tool


Manage and monitor

Security

BPM Modeling and Simulation Tool for business analyst Connection, routing tool for architect Data Mapping and Conversion Tool Process Services Business Logic written in Java, C, C++, etc. Low level Service Orchestration Tool for developer

Databases 2008 Oliver Wyman www.oliverwyman.com

Systems of RecordDocument number

11

Banking Examples of SOA Internet Banking

Registry and Repository: Find Stop Payment Service, Charge Fee service

Security: Authenticate user

Manage and monitor

Business Process: Stop Payment ESB: Routes to appropriate core system Data Services Process ServicesBusiness Logic: If Customer_Status = Gold Service_Fee = $8 else Service_Fee = $20

Orchestration:

Fee database

DDA / Current Account


Document number

12

Web Portals A Map of SOA Components Web Portals provide a single user interface to multiple back end systems via a service oriented architecture and HTML. Portals can hold multiple service requests and display them in portlets. An example would be with internet banking displaying a customers - banking products - Investments - credit card balance (from another LOB or monoline) - mortgage information (from another LOB or monoline)


Document number

13

Portal Example

Portlet to credit card company


Document number

14

Business Process Management can be broken into three parts

Design: Usually with graphical eclipse based tools Execute: Monitor: Make sure that SLAs are met.


Document number

15

Example of BPM: Open New Checking Account

Human Business Process Management (BPM)Existing Customer?Yes No

Scan KYC Information

Run ChexSystem

Result OK?

Features of Human BPM: It involves human interaction (such as scanning KYC information) It uses external processes such as Chex System. It can be used to standardize business processes and reduce operational risk.


Document number

16

Enterprise Service Bus (ESB) is the communication backbone of SOA. Enterprise Service Bus (ESB) It generally supports the following functionality: Message transmission, routing, queuing, and monitoring Synchronous, asynchronous, point-to-point, and publish/subscribe messages XML and SOAP messages Adapters to legacy systems It also supports services which are called out in other modules: Data Services Process Services


Document number

17

Put all the pieces together to get a Services Oriented Architecture

Web Portals


Manage and monitor


Security

Databases

Systems of Record


Document number

18




Document number

19

What does SOA do for me?

Enables abstraction of core systems for isolation and potential replacement. Enables efficient messaging and business processes from the front end channels. Enables reuse of common business processes for greater efficiency.


Document number

20

Enables abstraction of core systems for isolation and potential replacement.

Web Portals


Manage and monitor


Security

Databases

Systems of Record Isolate this system by accessing only via data services and process services. number Document


21

Enables efficient messaging and business processes from the front end channels. . Web Portal: Internet Banking Web Portal: Teller IVR Web Portal: Call Center Web Portals: Sales Platform


Manage and monitor

Security

Enterprise Service Bus (ESB) Data Services Process Services Business Logic Orchestration System BPM


Databases

Systems of Record

Document number

22

Enables reuse of common business processes for greater efficiency.

Web Portals


Manage and monitor

.


Security

Databases

Systems of Record


Document number

23




Document number

24

How do I deploy it?

Channel driven LOB driven IT driven


Document number

25

Channel driven SOA is the most common

A single channel can create an SOA for itself and then share it later.or not. Wide adoption across the bank isnt guaranteed.


Document number

26

LOB driven SOA

An LOB might need functionality that isnt available without integrating multiple systems or creating a new system to assist in a business goal.


Document number

27

IT driven SOA

This is a pure plumbing play and is difficult to drive across the bank. Who pays for these projects?


Document number

28

National City Business Drivers

Single view of the customer Customer Management Objectives (CMO) drive customer experience Call center ATM Statement messaging Branch


Document number

29

From old architecture

Channels Integration Layer CIF Analytics Later Data Warehouse

.. .

StmtsPosting Ledgers Pricing


Notcs Posting Ledgers Pricing

Bills Posting Ledgers Pricing

Campaigns Later 2007 Celent LLC

General Ledger 2008 Oliver Wyman www.oliverwyman.com

30Document number

30

To new.Channels Service Enabled Integration Layer Integration Layer Contain CIF Leverage Analyticss es in ing us ll B Bi

Stms Posting Ledgers Pricing

Notcs Posting Ledgers Pricing

Bills Posting Ledgers Pricing

Data Near Real Time Data IDH Warehouse WarehouseCo Pr ns ic um in e g r

.. .

Contain Leverage General Ledger

Campaigns 2007 Celent LLC

Correspondence31Document number

CIF


ew R d ar s


31

Additional Questions?

Read the Celent Reports A Tale of One City: Core Renewal via SOA at National City Bank - http://www.celent.com/PressReleases/200712122/CoreRenewalNatCity.asp A Christmas Carol: Wells Fargo Sings the Praises of SOA - http://www.celent.com/PressReleases/20071221/WellsFargoSOA.asp Great Expectations: Can SOA Deliver? Part I: Core-Driven SOA (Non-US) - http://www.celent.com/PressReleases/20080516/GreatSOAPartI.asp Great Expectations: Can SOA Deliver? Part II: Core-Driven SOA (US) - http://www.celent.com/PressReleases/200805xx/GreatSOAPartII.asp Great Expectations: Can SOA Deliver? Part III: Front End SOA Great Expectations: Can SOA Deliver? Part IV: Platform SOA To ESB or not To ESB

Or Contact Bart Narter ([email protected]) San Francisco


Document number

32

SOA in Banking

Documents

number of services

modular services

compound services

monitor business process

data conversion services

number great expectations

funding account credit

following granular services