September 24, 2015
Publication: Fierce FinanceIT
About two years ago, looking for a way to modernize aspects of its architecture, PNC Bank joined the Banking Industry Architecture Network (BIAN), a nonprofit group looking to reduce integration cost for banks through the creation of consistent service definitions in a service-oriented architecture.
Now, PNC is in the execution phase of an “extremely large” initiative to modernize its payments systems, specifically payments internal to the bank such as ACH flows and processes for handling exceptions and approvals, according to Eric Donnelly, chief enterprise architect for PNC Bank. PNC aims to explore expanding its application of BIAN frameworks to more external payments processes, such as wire transfers and SWIFT processing, later this year. The updated systems are expected to go into production next year.
As PNC is extending its implementation BIAN services, BIAN is also expanding – both geographically and technologically. The organization held its first North American chapter meeting earlier this month, which it expects will eventually result more service standards to address US banking issues, such as US regulatory compliance requirements, said Hans Tesselaar, BIAN’s executive director.
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Technologically, BIAN currently has approximately 280 definitions of service standards, and is continually creating new ones based on member needs and demands. The organization has 66 or 67 members, 40 percent of whom come from banks, with most of the remaining 60 percent coming from vendors. There are four universities that are members as well.
“It’s all member-driven; we don’t have employees” said Tesselaar. “Members populate the work groups and members decide what new work groups we start.”
For PNC, whose systems were not up-to-date with modern capabilities, and whose workforce was trained on existing older systems, BIAN helped plot the course to a more modern architecture. That the organization’s service standards have been developed by the industry, and already adopted by multiple vendors working in the industry, made it a more natural transition.
“In order to do a roadmap, you need to know your starting point and your end point, and sometimes defining that end point is one of the hardest things you can do,” said Donnelly. “BIAN gave us that end point much quicker and more efficiently than anything we could have done on our own or with services from a big five consulting company.”
The bank has worked with vendors that have developed implementations based on the BIAN standards, enabling it to adopt the standards without relying on internal teams to write and test code.
While PNC was the first North American bank to become a BIAN member, it now has four North American Bank members. First Niagara, Discover and CIBC have all joined, and four other firms attended the first North American chapter meeting on a trial basis.
Meanwhile, PNC’s Donnelly expects to continue to use BIAN services to modernize and envisions the path to modernization will eventually take it beyond the original vision of a service-oriented architecture to a more open API-based architecture.
“I think it we start looking at the 5 to 10 year plan, the real lift will occur as Web open APIs continue to propagate and organizations from independent companies to the financial institutions themselves begin to build and integrate and standardize based on those APIs,” he said.
It’s something a BIAN working group is currently exploring in conjunction with Carnegie Mellon, one of the organization’s university members.
“There is a group of post graduate students trying to come up with an overarching model for the whole open API issue, so that each bank doesn’t have to invent its own APIs” said Tesselaar. “We will see if we can speed it up a bit from a joint effort perspective.”