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Service-oriented architecture: Melding together incompatible platforms

As the financial services industry strives to recover from the financial crisis of 2008, many banks are still working diligently to recoup lost revenues and declining market share. This is proving increasingly difficult as new legislation and regulations have stymied many existing business practices and enacted deeper restrictions on what is allowable.

Over time, institutions have created and added new technology to address specific business needs. As projects and demands continued, more systems were added, each with individual connections, processes and logic. This has created a legacy infrastructure that many banks struggle to maintain today. Integrating multiple platforms and processing needs that are required to meet new and rapidly changing market demands is becoming a daunting task. This causes further delays in an institution’s ability to meet constantly changing customer requests. Much of the time lag is due to a lack of standards for integration to back-office systems. This adds even more expense and risk to new projects, creating even more delays.

One technological advance that is helping banks alleviate many of these past pressures is service-oriented architecture (SOA). SOA defines applications into service areas that allow sharing across the institution rather than building external interfaces between each system. While there are many IT benefits for supporting a model like this, an important note is how it affects the business itself. Many financial institutions are using SOA to act as the middleman for connections between previously incompatible systems. This allows lines of business to add new channels faster, replace older systems quicker and perform centralized upgrades. If a bank decides to outsource or insource a function, it can do so faster than ever before with the help of SOA.

Building flexibility into connectors can also help facilitate business decisions. No longer will banks going through an acquisition and merger have to deal with the inefficiencies of running multiple back offices. On the cost-savings side, banks can extend an application’s life span if adding functionality is made easier. Functions also can be centralized to reduce redundancies.

One of the best features of SOA is that it can be implemented in stages. Phases can be timed to meet demand versus a full-on implementation of new applications that could not be scaled by business demand. By creating a plan for incremental releases, an institution can reap the benefits during each stage of deployment, making it easier to justify and course correct in near real time.

Technology plays a large role in the products and services banks offer today. Using SOA to meld together platforms that didn't previously converse allows financial institutions to create new opportunities, drive innovation and reduce costs.

How is your organization deploying SOA? Join the discussion.


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