Industry Focus | Issue 08

industry focus ISSUE 08 | January 2016

A CNME supplement

going digital

The banking transformation roadmap

BANKING special

Contents

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The future of banking

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Hani Nofal, VP of Intelligent Network Solutions, and Rami Sawan, Sales Manager –Banking and Finance at GBM, discuss what is in store for the banking and finance sector in 2016.

Serving up the best

Mehdi Quraishi, CEO of Dubai-based IT services provider ixtel, on the latest technology trends in the BFSI sector and what his company has to offer.

Digital innovation

Girish Narayanan, Managing Director of Granteq, talks about the trends of digitalisation and collaboration in the banking sector.

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Loaded with cash

Ihab Al Saheli, GM, CNS and David Stockton, CEO of G4S UAE, discusses a new managed ATM service that will revolutionise banking touch-points.

How technology will transform banking in 2016

Blockchain, digital challengers and IoT to redefine the industry.

Banking on security innovation

Banks are being targeted by cybercriminals, and as the number of data and devices increase, cybercriminals will only be more encouraged to attack banks. Are banks being innovative enough with information security to ward off threats?

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interview

Hani Nofal, VP of Intelligent Network Solutions, GBM

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Industry Focus

The future of banking Hani Nofal, VP of Intelligent Network Solutions, and Rami Sawan, Sales Manager, Banking and Finance at GBM, discuss what is in store for the banking and finance sector in 2016.

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hat are the unique dynamics of the regional banking and finance industry?

Nofal: Our outlook for 2016 centres largely around there being a great deal of innovation in the space.

We’re seeing more and more companies who are determined to innovate around the customer experience. This presents a golden opportunity for us to partner with banks to deliver this improved experience. Most countries in the Middle East want to be leaders in banking and finance so it’s extremely competitive; every country is always trying to outdo each other in terms of its banking services.

Sawan: In the wake of economic challenges brought on by oil prices, everyone, including those in the banking industry, is focused on cutting operational costs. However, I am confident that banking and finance sector in the region will be able to adjust to these changes as this sector has always been quick to adopt new trends and technologies available. Having said that, more and more banking firms will embark on the digital transformation journey, and banks will work towards becoming more customeroriented.

What kind of technology trends will shape this vertical in 2016?

Nofal: The usual suspects will be high up the list. Security is always going to be a top priority for any bank. Retaining customer loyalty is paramount, so banks have to do what they can to ensure that customers are in safe hands.

Banks will also devote a lot of attention towards gaining a better understanding of their customers so that they can customise products and services for their benefit.

This will also allow companies to leverage more effective marketing campaigns towards them. There will be an increase in companies investing in analytics platforms.

There have also been a lot of discussions around investing in mobile solutions for mobile banking and payments.

Sawan: The industry has been talking about the cloud for the last two to three years. Although,

security is still a primary concern, beginning this year more and more banks are going to start leveraging the cloud to better their offerings to their customers. Due to regulatory restrictions, of course, the move to the cloud will only be for the non-critical applications.

Also, what’s on the minds of CIOs and other C-suite executives is the move to digital banking.

The reason behind that is we are now in the ‘age of smartphones.’

Today, people of all ages have their smartphones or other mobile devices and they often want to access different services any time of the day. Because of this, banks are seeing the need to be in touch with their customers 24/7, and this is how they need to compete with one another.

So I believe cloud, digitalisation and mobilisation are the trends that will impact the banking industry this year.

Banks will also devote a lot of attention towards gaining a better understanding of their customers so that they can customise products and services for their benefit.”

Industry Focus

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interview

have become more mobile and also more secured, and most banks allow customers to use services with smart mobile devices. Still, there’s a lot to be done in terms of building intelligent platforms. Banks will be looking at more advanced services for customers that allow them to better manage risk through a range of channels, and make more informed decisions.

Rami Sawan, Sales Manager, Banking and Finance at GBM

In 2016 we’ll be putting a lot of emphasis on our managed services and cloud offerings as well. Many banks have a great deal of confidence in us because we’ve proven ourselves as a one-stop shop for true SI partnerships.”

How can tech providers like GBM help this sector to benefit from these opportunities?

Nofal: We’ve been here for nearly 26 years now so have fantastic local expertise. First and foremost, we’re associated with banking, and most banks in the region are associated with us in some way or another.

The confidence we’ve built around our brand allows us to partner with all these organisations. We’re also in a unique position because we’ve diversified our business. Customers can benefit from the IBM hardware, software and solutions we provide, as well as our networking infrastructure offerings through our partnership with Cisco. This is our unique value proposition as we 6

Industry Focus

are their only certified partner for this. In 2015, we successfully helped a range of organisations make their data centres automated and software-defined.

In 2016 we’ll be putting a lot of emphasis on our managed services and cloud offerings as well. Many banks have a great deal of confidence in us because we’ve proven ourselves as a one-stop shop for true SI partnerships.

How do you see digital banking evolving in this region?

Nofal: From what we’ve seen in the consumer market over the last 15 years, things have evolved a great deal. Consumers now have a range of ways to interact with banks. Things

Can you discuss some of the BFSI success stories from 2015?

Nofal: We’ve seen multiple success stories. We recently completed the upgrade of Mashreq Bank’s data centre and branches. It’s now a next-generation data centre with reformed capabilities. We’re also due to complete a major upgrade for First Gulf Bank. We have many SME projects across the region as well.

What business transformation strategies should banks consider this year?

Nofal: Banks need to invest in smarter platforms for analytical capabilities. They need clear strategies and need to partner with someone who understands the true value of technology. Mobile banking is a major initiative that has to be explored, via the use of secure platforms.

Sawan: Aside from investing in the right tools and skills that would help them in their IT transformation, they should also put more focus on their culture transformation. This means that they should also make sure that everyone in the bank from operations, management and so on are on-board in becoming more customer-oriented.

With the help of the right technologies, banking firms must be able to find out as much as they could about their customers. Once they do they’d be able to give them better services and they’d be able to achieve further business growth.

interview

Serving up the best Mehdi Quraishi, CEO of Dubai-based IT services provider ixtel, on the latest technology trends in the BFSI sector and what his company has to offer.

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hat are the unique dynamics of the regional banking and finance industry?

As technology advances and customer expectations rise in an increasingly digital world, a more cautious lending and investment climate has made it more important than ever for retail banks to improve the customer experience, whilst ensuring robust risk management processes and security systems are in place.

Another area where significant evolution is expected is in the banking channels. Over the next few years, regional banks plan to place emphasis on digital distribution, with a stronger focus on transitioning more customers to selfservice channels.

What kind of technology trends will shape this vertical in 2016?

The evolution of technology and heightened customer expectations combined with the emergence of disruptive competitors, especially emphasis on digital distribution, with a stronger focus on transitioning more customers to self-service channels, creates new pressure to deliver higher levels of service. Succeeding in this environment may require a fundamental rethink in approach.

Retail banks across the region are expected to undergo a digital transformation in the coming three to five years as customers increasingly prefer using digital channels to interact with their banks. Customers have never had so many ways in which to interact with their retail bank. They increasingly

start their purchase or investment journey on one channel, are influenced by another and can end up finalising the arrangement on a completely different channel.

The central challenge of Youbiquity Finance is to make finance services available everywhere, and integrate them in a way that provides seamless service to customers.

How can tech providers like ixtel help this sector to benefit from these opportunities?

We focus on meeting our clients’ complex challenges. Working together with retail banks, we can create a better, more integrated experience for their customers, while providing solutions that improve cyber security, compliance and efficiency ixtel is helping them adapt to the changing face of retail banking through its digital transformation solutions such as customer analytics to drive contextual experiences, expedited deployment of digital delivery, mobile-first design, increasing digital and social selling, mass market acceptance of mobile payments and focus on security and authentication How do you see digital banking evolving in this region?

Financial services providers need to do more than just provide fast and low-effort service and sales to customers. There is also the need to elaborate and provide more information, communication and direction to consumers when they want to invest time to make the right decision about their money. This will drive customers’ emotional engagement.

Mehdi Quraishi, CEO, ixtel

Can you tell us about ixtel’s value proposition to this sector?

Retail banks enable billions of dirhams to be exchanged between consumers and corporations every day, so the integrity and security of the banking system is paramount in order to maintain customer confidence.

With increasing levels of cyber threats coming in many different forms, through both internal and external sources, ixtel solution provides a single view of their ICT security infrastructure, allowing retail banking customers to: • Protect your critical infrastructure against multiple attacks, keeping your operations secure • Defend against simultaneous cyber attacks • Fully review actions and decisions made during an attack to improve future responses and protocol • Provide authentication services to secure your on line banking • Reduce the time taken to diagnose and act on attacks • Augment your skills, capabilities and capacity with security-cleared experts Industry Focus

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interview

Digital innovation Girish Narayanan, Managing Director, Granteq, discusses the trends of digitalisation and collaboration in the banking sector.

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hat are the unique dynamics of the regional banking and finance industry?

Until recently, the focus of banking and other sectors was on deploying the right kind of infrastructure that ensures minimal costs and maximum ROI. But as we are entering a mobile world, every industry is focusing on digitalisation. In the banking and finance sector, priorities are now shifting from product innovation towards enticement and engagement in line with the overall client experience.

Quicker, easier and accessible means of doing banking is what customers are looking for because of which mobile banking, applications and other digital initiatives are on the go.

What kind of technology trends will shape this vertical in 2016?

2016 will fully focus on technology as an enabler in maximising client experience. From what I see, the industry is already giving a lot of focus on deploying faster means of communication, collaboration and mobile via technology.

How can Vidyo that you distribute in this region help this sector to benefit from these opportunities?

Video-enabled assistance solutions are gaining support and adoption around the world, fueled by a shortage of experts, and the need to decrease time and costs related to traveling on-site.

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Vidyo has proven expertise in building customer loyalty with its highly personalised and easy to use online services for customers.

Granteq has empowered many reputed banks with faster communication and collaboration not just for their customers but also for every bank’s internal collaboration with Vidyo’s patented technology.

How do you see video collaboration evolving in the BFSI sector?

With the emphasis on cost reduction, quick access and mobile technology, I am quite confident that Vidyo’s technology will prove to be very beneficial to the BFSI sector. Highly reputed banks in the region have witnessed the raise in customer satisfaction and maximised customer experience because of Vidyo. The best part is that Vidyo is designed to deliver the best quality over any network be it 3G, 4G or Wi-Fi, to virtually any endpoint, including mobile.

Of course, online banking offers convenience to customers, but banks do recognise the need for a face-to -face communication and that’s where video collaborations come into focus.

Girish Narayanan, Managing Director, Granteq

What are the business transformation strategies for banks to consider this year?

Banks are leveraging new communication channels with a prime focus on enabling customers with a ‘wow’ experience. As the world is moving towards digitalisation, it is quite evident that banks also are adapting to these agile trends. In the coming years, as it has been witnessed since 2014 that banks are consciously finding new collaboration techniques, the same shall continue with more innovative ideas getting dominant. These initiatives are definitely a part of their annual plan and strategy, the execution of which will be seen with many more revolutionary technologies initiated in the BFSI sector.

interview

Loaded with cash

CNS has recently partnered with cash-in-transit solutions provider G4S to provide end-to-end ATM managed services that aims to boost the reliability of ATM performance in the region.

Ihab Al Saheli, GM, CNS and David Stockton, CEO, G4S UAE, talk about why this new service will revolutionise banking touch-points.

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an you tell us a bit about this new service?

Saheli: This new solution is

a fully integrated managed service that offers secure, proactive and preventive ATM management while maintaining one point of accountability.

The solution ensures efficient machine performance by constantly monitoring all ATM machines remotely and anticipates any incidents to keep the ATM up and running most of the time. This effectively lowers operating cost, enhances service efficiency, and also substantially reduces the dead cash inventory.

In the current situation, the industry is facing major challenges including downtime with the ATM machines for various reasons and eventually end up spending a lot of time and energy in identifying the root cause. Thanks to the solution’s pre-installed ATM management tool, banks will be able to identify more than 80 percent of the errors even before they arise and be able to enhance the lead time.

This solution will maintain a single point of contact with 24/7 support for banks. This software solution will ensure fewer ATM errors and minimize faults by 80p percent.

Ihab Al Saheli, GM, CNS

Stockton: This solution helps optimise internal costs associated for ATM operations in the UAE. Unlike other countries, the consumer demand for ATM uptime is very high here because cash is a commodity that is used highly in transactions.

Can you give us an overview of the partnership with CNS and G4S? Saheli: The objective of the partnership

is to deliver and integrate an end-to-end managed services solution to the banking sector. This will allow banks to manage their ATM operations efficiently.

CNS is bringing in the technology dimension, thanks to our deep experience

This solution will maintain a single point of contact with 24/7 support for banks. This software solution will ensure fewer ATM errors and minimise faults by 80p percent.”

and knowledge of ATMs from all perspectives such as the technology, solution, software and hardware behind it. G4S brings in their knowledge and their expertise in the cash-in-transit (CIT) operation.

We are managing these two forces together so that banks will have an integrated end-to-end managed services solution.

The objective of the solution comes down to two things – customer experience and satisfaction and will allow us to help banks reduce their operating cost when it comes to the full cycle of ATM management.

What are the other challenges within ATM management that the banks are currently struggling with and how can this technology help?

Saheli: Banks today have two major

challenges when it comes to ATM management. The first one is the availability of the ATMs, which means making sure ATMs are available and accessible. This is more of a technology challenge. The second challenge banks experience is the availability of cash in the ATMs. While there are other challenges, I’m focusing only on these two major ones. To overcome these challenges, merging its capabilities to offer an integrated end-to-end service. This is a great option for banks because the service we are offering is secure, proactive and preventive. Why do we believe it to be proactive and preventive? This is because we will be monitoring the behaviour and needs of the ATM’s through our centres and in coordination with the banks. And we will proactively act on this.

Industry Focus

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How technology will transform banking in 2016 How blockchain, digital challengers and IoT will redefine the industry

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D

uring 2015 the big banks continued to invest in modernising their infrastructure as well as focus on delivering services through digital channels.

But the competitive landscape has intensified as they continue to fight on a number of fronts, and the wave of fintech startups, digital challengers and tech giants present a threat that is unlikely to go away soon.

At the same time, a wave of innovation in the sector offers a number of opportunities for those that are able to move quickly. Blockchain has certainly been the clearest example this year.

So what will set the banking technology agenda in 2016?

Banks will come under increased pressure from tech giants

It is no secret that a major concern for the big banks is having their lunch eaten by the likes of Apple, Google, Facebook and Amazon. And we can expect these Internet behemoths to build on their consumer relationships and make further inroads into payments this year.

Apple launched its Apple Pay mobile payments service last year, and others such as Samsung are set to move into the market with similar offerings too. While Barclays has its own wallet, Pingit, it will be interesting to see if other banks attempt to stake a claim in this market too, or leave it to the big tech firms.

“A concern that the banks have is the arrival of big ecosystems that will replace them, so Google, Facebook, Apple, etc,” says Alessandro Hatami, former digital payments and innovation director at UK bank Lloyds.

“These are customer-based. The customers are already users of these

environments. If they start pushing financial services to their own customer bases, these ecosystems can potentially take customers away from the banks.”

Philippe Gelis, CEO of P2P currency exchange Kantox adds: “These tech giants are unlikely to ever become banks, but they are best placed to build user friendly front-end tech solutions that answer to consumer demands for seamless payments and financial services.”

Emergence of blockchain and bitcoin ‘unicorns’

Blockchain - the distributed ledger technology underpinning bitcoin cryptocurrencies - generated huge interest in 2015 and it is likely to continue in 2016 as adoption broadens.

Many banks are already investigating how they can utilise blockchain applications within their business, while IT vendors such as Microsoft are helping them create real use cases. At the same time, a growing ecosystem of startups are pushing the technology, which many believe has uses outside finance too.

According to Jeremy Millar, partner at Magister Advisors, M&A advisors to the technology industry, this year will see the emergence of at least five bitcoin and blockchain businesses with a valuation of more than $1 billion.

“These valuations will be built on the opportunity of selling products and services into the largest and most profitable industry in the world, not on subsidising consumer services to drive adoption or building audiences to monetise with advertising.

“These new companies will have real lasting value; they’re not creatures from a fairy tale that will fade away when their valuations, which are based, appropriately enough, on leaps of the imagination, drop.”

A recent report from Misys claimed that while 96 percent of banking professionals polled believe that wearable tech will impact their industry, only 15 percent are currently rolling out their own.”

Financial services may not be the first sector, which springs to mind when discussing the internet of things.

But as a recent Deloitte report points out, the explosion of internet connected devices will provide better data for decision-making.

Auto insurance telematics and ‘smart’ commercial real estate buildingmanagement systems offer some of the more obvious examples. But using sensors monitoring the activity of agricultural or manufacturing industries could help inform investing or lending decisions.

Mike Laven, CEO of Currency Cloud, says this will provide opportunity for new players in the market.”When IoT crosses with finance, we suddenly get an explosion of data. It starts to get interesting when it comes to figuring out how to use that to great effect - and more specifically how to monetise the use of that data is something new fintech entrepreneurs will be looking to figure out in the New Year.”

Banks will push wearables apps

While some banks had tested out wearables apps on smartwatches before, the launch of the Apple Watch convinced more to get on board.

Nevertheless, applications remain limited. Balazs Vinnai, general manager, Digital Channels, Misys, says that it is not a lack of consumer interest that is holding banks back from further investments in this area. “Banks continue to face challenges with their digital strategies so it is no surprise only a small percentage currently support wearables.”

A recent report from the fintech firm claimed that while 96 percent of banking professionals polled believe that wearable tech will impact their industry, only 15 percent are currently rolling out their own. However, the majority expect to have done so within the next two to three years.

“It is critical for banks to consider new digital channels as part of an integrated strategy and evolve from first to second generation digital banking: switching digital from a supporting role, to the primary sales and communication channel for banks,” says Vinnai. “Reengineering processes around the customer is not easy, but banks must embrace digital banking to remain competitive and relevant.”

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Feature

Banking on security innovation

Banks are being targeted by cybercriminals, and as the number of data and devices increase, cybercriminals will only be more encouraged to attack banks. Are banks being innovative enough with information security to ward off threats?

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rom chip-and-pin fraud and distributed-denial-of-service (DDoS) attacks to malware and nation-state APTs, cybercrime has become a big problem for banks across the world.

In the last year alone, we’ve seen the emergence of Carbanak, the Russian gang which stole $1 billion from more than 100 banks across 30 countries, as well as highprofile data breaches at JP Morgan Chase, HSBC, Halifax and Barclays. JP Morgan subsequently pledged to spend $500 million on security following its breach in late 2014, a trend adopted by many other companies post-breach. Indeed, PwC predicts that US financial services companies will increase their cyber security budgets by $2 billion by 2017.

Banks more open to attack

This spending, and increased focus on information security, is hardly surprising.

Banks are being asked to be more open, digital, and customer-focused through the advance of newer technologies like mobile payments, biometrics and wearable devices. Even additional security, such as two-factor authentication and password management, must be done with user experience in mind.

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Industry Focus

This is, however, putting an enormous strain on bank security teams, supply chains and compliance, as outlined by UBS CIO Oliver Bussmann in a recent blog post. “[The] digitisation of services means data privacy becomes an even more important issue than it already is for every financial services institution.

Recent malware incidents show how fast changing cyber-security threats are and how important it is for any new technology to place data protection above everything else.

“The regulatory landscape is also becoming tougher and any new developments must be integrated.

Consequently IT systems need to have the flexibility and agility to respond to new demands from financial authorities. This is challenging, particularly for smaller entrants to the market, because resources are finite,” said Bussmann, adding skills is another ‘major’ challenge in light of the advance of new technologies.

Commentators, subsequently, say that banks now have to innovative to satisfy customer ‘wants’, rather than needs, with YBS Group head of information security and risk, Mike Jolley, saying customercentric strategies are emerging.

“Strategic trends are around a customer-first digital strategy. A year or so ago it was digital first,” he said.

Start-ups

Alex Van Someren, managing partner of the Early Stage Funds at Amadeus and director of the Cylon London start-up accelerator, believes banks must think like hackers.

“The most advanced banks take a pro-active approach to cyber-security.

They think like hackers: conduct external penetration testing against themselves, mine the dark web for their own information leakage, apply data classification products to prevent data loss (DLP). They do not rely on major product vendors alone, but experiment with leading-edge technologies from start-ups to evolve their defenses.”

Troels Oerting is Global CISO at Barclays Bank, which has been working with numerous security start-ups, partnered with Europol on sharing threat intelligence, and even ‘hacked’ its own systems to ensure they are secure. The international bank is reportedly boosting its security spend by 20 percent.

Oerting, formerly of Europol’s European Cybercrime Centre, is

capability to ensure they have a better chance of detecting early and responding effectively to contain the damage.”

Cloud concerns remain

mentoring a handful of start-ups in New York, Cape Town and Mumbai – and is leading accelerator programs in New York and London.

“We’re increasing our footprint on the accelerator program and on innovation too. We want to see if I can find companies that provide us with things that we want to be researching and developing. It could be blockchain technology, the replacement of the password, increasing endpoint security, the elimination of anti-virus, or DNS security.

“Privacy and security protection is such a big part of what a bank sells – because a bank sells trust. So, instead of waiting for security companies to deliver something when they see fit, we thought why not identify how we could improve the security by design in our own applications, platforms and endpoints… and maybe assisting customers too.”

Oerting says it is important to first identify the bank’s vulnerabilities before asking for help from security start-ups.

The start-ups he now mentors includes one that tracks Bitcoins and other digital currencies on Blockchain, another which uses Blockchain to secure diamonds, and a third which provides interactive

security awareness training online using virtual reality and 3D glasses.

The Barclays chief admits that all this won’t stop the bank being breached – so instead he is prioritising the bank’s incident response through red teaming which tests internal applications, perimeter defense and staff against phishing attacks.

“If we get penetrated, we want to make sure we react very fast. It’s about shortening the time from detection to reaction. We acknowledge we probably will be penetrated, but we need to detect it, and isolate or kick them out as soon as they are in.”

“The aim is to make it too costly for a criminal gang to steal our money. Any criminal gang looks at risk, investment and profit and if that doesn’t match up, they will go elsewhere”.

He says there are numerous ways of ‘kicking out’ the hackers, while Van Someren says that most forwardthinking banks are now considering honeypots and dummy data sources.

Jitender Arora, another CISO in the financial services sector, agrees that response is now pivotal.

“Organisations are now looking at improving their detection and response

Barclays is, of course, not the only bank trialing new security measures.

In recent months, Citibank, UBS and others have experimented with Bitcoin, Halifax has been trialing heartbeat authentication and Credit Agricole has tested Blockchain. Citi Ventures has been investing significant money in security start-ups including Pindrop, vArmour and Illusive.

There is significantly less interest in security in the cloud, however. Jolley says that vendor moves, the collapse of Safe Harbor and the incoming EU General Data Protection legislation, have put banks off.

Nik Whitfield, CEO of UK cybersecurity start-up Panaseer - which works with investment banks, agrees: “If you ask [CISOs] ‘would you put security in the cloud?’ they would say no way.

Certainly, we don’t see any of the big guys moving security data wholesale into something like AWS.” Arora disputes the view that banks are innovating at all: “Most organisations are quite static when it comes to their standard business services and technology stack,” he says.

“Imagine an organisation with 20,000+ servers, 1,000+ applications, 100,000+ end points and variety of technology flavors; it’s a complex landscape which makes it expensive and difficult to make drastic changes.”

Big data

Instead, some suggest that banks continue to face age-old problems, such as compliance and data storage, in the face of the mass collection of data.

Whitfield says there is now too much data for CISOs to derive any insight, with SOC teams also overrun with threat intelligence alerts.

“They realise they’ve only got very limited visibility of what is going on,” says Whitfield, adding that new technology solutions are often siloed and thus don’t talk to each other. Other experts say threat intelligence sharing issues remain.

“A CISO wants to get a broad picture of what is happening…but it’s simply not possible at the moment.”

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BLOG

What powers your mobile banking?

Bryan Smith, CTO of Rocket Software, discusses the little known secret behind the powerful convenience of online and mobile banking.

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s someone who lives and breathes mainframes, I often forget that people who aren’t part of this world don’t always believe some of the truths that I believe to be self-evident. One common way that I raise eyebrows is when I tell my fellow technologists that mainframes are perfect for supporting mobile applications. In fact, it is almost guaranteed to invoke skepticism. So let me just say it again: mainframes and mobile are a perfect combination.

At first glance, it’s easy to see why this might be somewhat incongruous.

Mainframes have been around for more than half a century, and for most of their history the idea of small, portable devices was the stuff of science fiction. When laptops, smartphones and tablets (and, more recently, intelligent wearables) came on the scene they were truly revolutionary because they fulfilled the long-standing promise of truly portable computing. So what role could “Big Iron” possibly play in a world of increasingly smaller devices?

The answer turns out to be “a pretty large one.” That’s because mobile devices are being asked to do far more than their underlying systems were designed to support. A great example of this is in the banking industry. Back when financial institutions first automated their systems using mainframes, the systems 14

Industry Focus

were designed to be used by bank staff.

Tellers used terminals to access customer accounts, and back-office staff managed the massive amount of data that banks generate every day. These systems were never intended to be directly accessed by the account holders.

Then ATMs came along, and for the first time account holders could access information (as well as cash) without having to interact with bank staff. A decade later, online banking made it possible for people to handle complex transactions with no human intervention at all.

So what does all this have to do with mainframes? Simply put, all of the underlying systems that support mobile banking are powered by mainframes, but they are being asked to do far more than they were originally designed to do.

This requires more than simply skinning an old app – it involves building entirely new functionality on top of an existing infrastructure with zero disruptions or system failures. And if this sounds like a pipe dream, consider that just about every bank in the world has successfully done this! They didn’t replace their mainframes…they created completely new functionality to support mobile deployments.

Let’s look at the specific example of a check clearing. Twenty years ago, people wrote checks and knew that it would

take a few days for them to clear. If an individual wanted to know if a check had cleared, he or she had to contact the bank (or go into the branch) where a teller would check on the status. Needless to say, this did not happen all that frequently. Today, with mobile banking, it’s common for people to check their accounts dozens of times a day from their smartphones.

Obviously, the previous generation of banking software was not designed to handle this kind of load, or to support any sort of remote access.

Financial institutions had to reinvent their systems from the ground up to accommodate the ways that customers access their data in the real world while maintaining the integrity of their data.

As it turns out, the mainframes that power most banks were able to handle this without breaking a sweat.

Of course, given the sheer number of banks around the world, a lot of different approaches were taken to enable mobility. But the one thing that all of these modernisation projects had in common was that the underlying technology remained on the mainframe. So the next time I hear someone express skepticism about the ability to truly integrate mobile and mainframes, I’m just going to invite them to pull out their phones and check their bank balances.

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