As an information-centric business, banks often make larger investments in IT than other industries. And the shift from a product-centric focus to a customer-centric one, as consumers expect new and evolving offerings, coupled with enhanced regulation, only serves to complicate this further.
Traditional systems are commonly inflexible, complex and house silos of data managed by hundreds, and sometimes thousands, of servers. What is required is a cost-effective platform that consolidates computing capability by creating a single, centrally managed system of shareable resources that support critical banking operations. And as customer expectations increase, platforms must be extremely reliable, scalable and as secure as possible.
In this environment it is perhaps not surprising that banks turn to the mainframe to provide the backbone of their IT operations, says Andy Hoiles, IBM's new workload leader for the Middle East and Africa. Today financial institutions are providing more services to more customers and their IT platforms need to innovate and enhance the bank's ability to meet these requirements.
According to Hoiles, the banking industry moved very quickly into the digital world, perhaps more quickly than most industries; in part because the industry's infrastructure has had to adapt to rising volumes of transactions and the need for adaptable systems. And with the advent of the Internet and mobile phones, banks can reach now more customers, more frequently, by making services and offerings available through innovation on these important channels.
Africa and FNB
While branch and ATM banking decline, mobile banking is showing no signs of slowing down. First National Bank (FNB) has seen significant growth across mobile channels - mobile and online volume has reached 165 and 175 million transactions per month, dwarfing in branch activity.
According to Jay Prag, CIO for Hogan channel integration at FNB, the bank's core banking platform allows customers the ability to transact from any location, which he believes has changed the face of banking in SA, and across the African continent. He adds that the mainframe offers FNB the flexibility to launch new offerings in limited amounts of time. "People underestimate what the mainframe can offer in terms of scalability, speed and performance."
Many citizens in Africa lacked access to financial services, having no bank account or regular income and the nearest bank branch often a prohibitive distance away, Hoiles says. "With the advent of mobile technology and networks, even in many of the more remote and rural areas, the landscape is changing for many of these citizens." He believes that the delivery of services using mobile technology allows African citizens to compete in the global environment, which fuels economic growth. FNB runs Hogan Systems software which they have consolidated services and applications onto the mainframe (http://www.csc.com/banking/offerings/11090/48573-hogan_systems).
There are many migrant workers across Africa who relied on long haul taxis to transport money to their families, which is slow and expensive. By enabling key banking services on mobile devices, FNB created a new digital channel that accounts for close to half of its transaction volumes, says Hoiles, adding that migrant workers can now transfer funds from their mobile phones with ease.
"With the centralised banking services integrated on the mainframe, which provides both the flexibility and agility to bring new services to market rapidly, FNB were able to launch these services in Africa with all the required resiliency, availability, scalability, performance and security that is required."
For Hoiles, FNB have proved that it is possible to launch mainframe services quickly and efficiently in countries that require the delivery of infrastructure that can be accessed wherever a mobile phone service is available.
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