Core Modernization in Banking: Hybrid Innovations Aligned with BIAN Coreless Standards

By: Venkataraman Balasubramanian and Chris Dickin
September 20, 2023
3 min read

The evolving trajectory of the banking sector showcases a harmonious melding of the steadfast reliability of on-prem mainframes with the flexible, transformative capabilities of cloud platforms. As highlighted in a recent CIO Dive article, leading banks are increasingly walking the line between safeguarding their robust legacy systems and embracing the agility and innovation of the cloud — a transition that resonates deeply with the tenets of the Banking Industry Architecture Network (BIAN).

Key Insights into Hybrid Banking Solutions: BIAN Compliant and Forward-Thinking

Mainframes: The Industry Backbone: At the heart of premier financial institutions lie their mainframes. These systems don’t merely offer unparalleled processing power and reliability — they are repositories of invaluable core data that banks are keen to retain control over. Protecting and controlling this data is a priority, emphasizing the importance and unwavering position of mainframes.

The Onset of Innovation in Cloud: While mainframes continue to be custodians of vital core data, it’s clear that specific workloads are ripe for a cloud transition. Domains such as product and pricing necessitate a profound depth of expertise, best delivered by specialized cloud platforms. By segregating product and pricing functionalities from the mainframe, a “multi-core” strategy emerges. This approach decouples various core systems from customer-facing channels, enabling simultaneous operation and experimentation. For instance, Zafin, in conjunction with both a next generation core and a traditional mainframe core, delivers immediate business value. This setup permits the exploration of the new core’s potential while preserving the integral understanding of the customer’s value to the bank.

Prioritizing Customer Experience in the Midst of Technological Advancements: By moving select workloads to the cloud, banks can refocus their energies on delivering exceptional customer experiences. While safeguarding vital core data with innovative technologies like Confidential Computing, the adaptability of cloud-hosted solutions for product and pricing empowers banks to stay nimble and attuned to shifting customer preferences.

Enhanced Security through Confidential Computing and Cloud Infrastructure: The hybrid model leverages advanced security measures inherent in modern cloud infrastructures. Reputed cloud providers incorporate Confidential Computing technologies, ensuring an extra layer of security that typically surpasses the defensive capabilities within individual banks. This approach guarantees that sensitive data is processed in a secure, encrypted environment, allowing banks to maintain the highest levels of data integrity and confidentiality.

Successful Integration of Hybrid Models: Mere advocacy for hybrid models wouldn’t suffice; real-world implementation underscores its vitality. Zafin stands as a beacon in this realm, pioneering hybrid strategies and transitioning pivotal workloads from on-prem to cloud among Tier 1 and 2 banks globally.

Aligning with BIAN: Standardizing the Banking Future

Hybrid models and BIAN’s vision go hand in hand:

  • Embracing cloud-forward architectures aligns seamlessly with BIAN’s philosophy, promoting enhanced connectivity, modularity, and service delivery excellence.
  • Standardization at the Fore: As BIAN places emphasis on APIs and interfaces, banks inclined towards hybrid models find themselves aligned with industry benchmarks, setting the stage for fluid innovation.

Charting the Path Ahead

The banking world stands at a confluence where age-old strengths blend seamlessly with future-forward strategies. This hybrid narrative isn’t a choice but an imperative. As banks strive for agility, adherence to global standards, and an unwavering focus on their clientele, they lay the groundwork for a transformative epoch in banking.

Navigating the Future with Industry Leaders

For institutions endeavoring to lead in this era, aligning with pioneers can make the difference. Dive deeper into the nuanced world of hybrid banking strategies and their real-world implications with Zafin’s insights. Ensure your strategy aligns with global industry benchmarks and set your organization on the path to modern banking innovation.

Founded in 2002, Zafin offers a SaaS product and pricing platform that simplifies core modernization for top banks worldwide. Our platform enables business users to work collaboratively to design and manage pricing, products, and packages, while technologists streamline core banking systems.

With Zafin, banks accelerate time to market for new products and offers while lowering the cost of change and achieving tangible business and risk outcomes. The Zafin platform increases business agility while enabling personalized pricing and dynamic responses to evolving customer and market needs.

Zafin is headquartered in Vancouver, Canada, with offices and customers around the globe including ING, CIBC, HSBC, Wells Fargo, PNC, and ANZ.

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