July 14, 2018

By Hans Tesselaar, Executive Director at BIAN

Customers are seeking more connectivity, more unique apps and more creative ways to manage money. In retail, big data is powering so-called “segment of one” marketing, allowing vendors to target consumers with highly personalised offers both in-store and digitally. We are now seeing a similar shift in financial services as banks move towards data-driven, open banking enabled marketplaces. This is good news for competition and customer service, but requires a much more elastic and robust approach to how applications are incorporated into a broader stack.

Despite this, those in charge of the IT infrastructure in many retail banks are still racing to keep up with this changing world; in many cases, legacy limitations mean that operations remain siloed and dispersed across functions. The result is a bit like comparing a modern city to an old town, which has outdated infrastructure, a lack of enterprise hygiene – and bad connectivity.
There are some major challenges to overcome in the quest for agility: every application has its own specific scope and boundary, and every point-to point connection is unique. As a retail bank’s application portfolio grows to several hundred overlapping systems, it is not surprising that adding or enhancing any system becomes an exercise in tracing these highly complex dependencies, which is often unclear as they sprawl across a system.

Where do we come in?

BIAN’s (Banking Industry Architecture Network) goal is to provide best practice architecture; a standardised planning blueprint that the banks across the globe can rely on to help them navigate the changing landscape. This blueprint is designed to help CIOs and IT teams measure and map their current model against an ideal world, future-fit architecture; one that allows for reduced costs, improved processes and increased opportunities for innovation across lines of business.
One of BIAN’s priorities is ensuring that the CIO has a very clear idea of which business functions in the bank have scope for more automation; what siloes can be broken down and where data can inform strategic decisions to allow the bank to reduce operational overheads and free up capacity, without incurring significant capex. At the core of BIAN’s proposition is the adoption of a capability-oriented approach to architecting the systems that support the bank, rather than the prevailing “process–centric” design.

Competition is rife – and rivals are free from legacy Infrastructure

From small FinTech firms to tech giants muscling into the payments space, competition is rife. For most of these emerging players, tech is in their DNA and they are unencumbered by limiting legacy infrastructure. This competitive edge cannot be ignored. To compete, retail banks must draw on their decades of sector experience. The scale of the apparent challenge is daunting, but failing to capitalise on expertise and strong existing global customer bases, would be a great loss. BIAN aims to help simplify what can look like a steep mountain to climb, with practical frameworks and a global network of expert members to share experience and knowledge.

BIAN – in practice

Our members have combined their industry expertise to define a revolutionary banking technology framework that standardises and simplifies core banking architecture. It is based on service-oriented architecture principles and fosters industry collaboration to provide a future-proof solution for banks. Together, we are dedicated to lowering the cost of banking and boosting the pace of innovation in the industry.
The BIAN standard can be applied/interpreted in all technical implementation environments and used in two key ways – either as a high level design specification for targeted solution implementation; or to define a stable enterprise blueprint for business and technical planning and analysis.

One of the simple ways in which this can be used is to identify every application in a bank’s portfolio and map it to the BIAN service domains in our enterprise architecture management tool. You can then look across your banking estate and clearly understand which systems are providing similar or overlapping capabilities. From there, it’s a simple step to create a bird’s eye view of your organisation’s business capabilities, identifying compliance, costs and obsolescence challenges – and priming your stack for a much more agile and competitive future.