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Banking Digitization using Hybrid Cloud on IBM Z
Exploit API and microservices to drive fast and agile innovation using a retail banking system on IBM Z.
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Banks and financial institutions are adopting open banking initiatives to comply with evolving banking regulations like PSD2, to meet customers’ digital expectations, and to adjust to new technological innovations. APIs are at the core of such initiatives allowing banks and financial institutions to leverage existing assets combined with latest innovations; it also provides an agile mechanism to quickly and efficiently develop new applications with partner ecosystems. This journey will utilize API calls to business operation processes running on a core banking system.
By Alexis Chretienne
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Developers in Financial Services require fast, reliable and secure ways to deliver software innovation that meets customer expectations for high-quality experiences all while meeting strict compliance requirements. 44 of the top 50 banks trust IBM Z to run their mission critical banking applications. APIs provide a secure mechanism to empower developers to use core business services to continuously build, refine and deploy apps quickly.
This developer journey will use a hybrid cloud infrastructure to access simulated retail bank applications on an IBM Z mainframe via Banking APIs published on IBM Bluemix. Like a retail bank, these APIs access an Account Management System, a Payment Hub, a Customer Management System and Machine Learning.
Three banking APIs have been designed (Swagger file) using IBM z/OS Connect EE and published using IBM API Connect Server hosted in Bluemix to access the various mainframe sub-systems. In this journey, there are 3 kinds of banking APIs:
- APIs managing banking customer information
- APIs managing banking account information
- APIs requesting loan approval.
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The user calls one of the published banking API through a secure API Gateway. The API is called using an HTTPS request constituted of a URI, a Method access, data and a Header. This header contains authorization keys that allows the user’s application to use banking APIs. The secure API gateway is hosted in IBM Bluemix (cloud) and all backend systems are in Mainframe, that is why an IBM Secure Gateway Service has been set up from Bluemix to link this hybrid architecture. A Secure Gateway Client has been set up in front of the Mainframe in a IBM Virtual Datapower Gateway.
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The banking API calls a service in one of the Mainframe sub-systems through the Secure Gateway Service. All data will be communicated from IBM Bluemix to the IBM Virtual Datapower Gateway. According to a configured Access Control List (ACL) file, the Datapower server authorizes or denies the request. ACL allows to control the incoming traffic from external network.
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If the request is authorized by the IBM Virtual Datapower Gateway, it goes to the expected Mainframe sub-system. Taking over the previous API introduction:
- APIs managing banking customer information requests the Customer Database on Mainframe
- APIs managing banking account information requests the Account Management System
- APIs requesting for a loan approval requests the credit scoring service based on IBM Machine Learning for IBM Z
- IBM API Connect
- IBM z/OS Connect Enterprise Edition
- Swagger
- IBM Secure Gateway
- IBM Machine Leaning on z/OS
- IBM CICS Transaction Server
- IBM Db2
- IBM Master Data Management
- A real core banking system (SOPRA Account Management) running in IBM CICS TS!
- IBM Virtual Datapower Gateway
The benefits of digital transformation for banks
In the words of Stephenson & Britain “Banks are the custodians and distribution of liquid capital, which is the life-blood of our commercial and industrial activities and upon the prudence of their administration depend the economic well-being of the nation”. Today, banks and financial institutions have become even more prevalent in modern society. In the process, they have collected an extremely vast amount of data and have reliably depended on the mainframe for handling large number of transactions per day and for securely saving transaction data. According to the most recent IBM Z announcement "Ninety-two of the world's top 100 banks rely on IBM mainframe " and " Eighty-seven percent of all credit card transaction are run on the mainframe". This extremely large set of data presents significant upside revenues if the banks digitally transform.
Digital transformation is about reshaping customer value proposition and transforming operating models for greater customer interaction. Developers will learn in this journey how to transform banking enterprise IT infrastructure into modern digital banking systems. They will learn how to connect banking enterprise IT infrastructure to systems of insights. Systems of insight are analysis systems that facilitate gathering, mining, organizing, transforming, and analyzing diverse sets of data with statistical modeling tools to detect patterns, report on what happened, predict outcomes with a high degree of confidence, apply business rules and policies, and provide actionable insight. The developers will leverage API Connect to help them create applications that use the vast amount of mainframe data without mainframe skills. The opportunities are endless, as developers can readily combine web applications with the latest analytics to connect to mainframe data via APIs.
TBD