Core Banking At Microsoft[1]

Core Banking with Microsoft Technology White Paper Published: February 2008 For the latest information, please see www.microsoft.com/industry/financialservices/banking/about.mspx#EEG

Abstract This paper looks at the latest trends in the market with respect to core system replacement and outlines Microsoft’s strategy for larger banks that are considering a service-oriented architecture (SOA)–based approach to migrating their legacy core systems from mainframe and midrange platforms to a new generation of commodity hardware platforms that run the Windows Server® operating system and that are capable of supporting the largest core banking operations.

Contents Introduction .................................................................................................................................................................... 1 Market Trends: Growing Momentum ................................................................................................................... 2 Trends for Smaller Banks ...................................................................................................................................... 2 Trends for Larger Banks ........................................................................................................................................ 4 Vendors Recognize Relevance of SOA ............................................................................................................ 6 Trends for the Future ............................................................................................................................................. 7 Business Drivers: Moving Toward Agility ............................................................................................................ 9 Core Banking Systems Face Challenges ......................................................................................................... 9 Using Agility to Resolve Issues .........................................................................................................................10 Core Banking Redefined ..........................................................................................................................................12 Uncovering the ―Core‖ of Core Banking ......................................................................................................12 Vision for the Future: A Transformation Roadmap ..................................................................................14 Surrounding Core Banking Systems ....................................................................................................................15 Mission Critical: A New Perception ......................................................................................................................16 SAP .............................................................................................................................................................................16 Itanium Solutions Alliance .................................................................................................................................18 Mainframe Migration Alliance .........................................................................................................................19 Mission Critical Program ....................................................................................................................................21 Service-Oriented Architecture .........................................................................................................................24 Conclusion.....................................................................................................................................................................32 Resources .......................................................................................................................................................................33

Introduction After years of debate about the need for core system replacement, there is finally evidence of growing momentum both in the market of smaller banks (dominated by package vendors) and in in-house projects of larger banks. For the larger banks, the approach to core system replacement is typically based on an overall service-oriented architecture (SOA) strategy and likely to combine elements of three different approaches: legacy code migration, core banking package implementation, and the introduction of re-usable ―banking enterprise services‖ alongside traditional in-house development. Clearly, the main business driver for legacy core system replacement is ―agility‖ and as a result there is a growing focus on incorporating workflow and business process management (BPM) technologies into the target architecture. Having long had a strong association with traditional ―surround‖ strategies aimed at overcoming the constraints of legacy core systems—strategies such as customer relationship management (CRM) and multi-channel integration that are strengthened by collaborative technologies—Microsoft now has a clear vision for the future architecture of core banking platforms. Microsoft is positioned to support the emergence of a new generation of agile banking platforms with flexible product definition, customizable workflow, and integrated multichannel distribution capabilities, built on SOA principles and using industry-standard communication protocols and vocabularies. The necessary mission-critical infrastructure based on Microsoft® technologies has been in place for some time and is continuously being strengthened by new product releases, including the 2008 launch of the Windows Server® 2008 operating system and SQL Server® 2008 database software. Combined with the availability of highly scalable commodity hardware and leading independent service vendors (ISVs) who offer their core banking solutions on the Windows® platform, this is leading to a gradual change in perception among senior banking executives. They are starting to recognize that Microsoft can offer a more cost-effective and agile alternative to legacy mainframe and midrange platforms traditionally used for core banking, without sacrificing important mission-critical requirements such as scalability, security, reliability, high availability, and manageability. Microsoft has also recognized this trend and is supporting it by means of the Mission Critical Program and membership in the important alliances such as the Itanium Solutions Alliance and the Mainframe Migration Alliance. A ―real-world‖ roadmap towards an SOA-based next-generation core banking platform requires a combination of an end-state vision, an ISV ecosystem that is closely aligned with this vision, and supporting technologies. Microsoft is well-placed to assist its customers with delivering on this vision.

Core Banking with Microsoft Technology

1

Market Trends: Growing Momentum The industry has—understandably—been predicting an increase of activity in legacy core system replacement for many years. Ample evidence exists for the assertion that there are strong business imperatives for addressing some of the constraints imposed by a generation of core banking systems that in many cases has its architectural origins in the 1970s and 1980s. Yet it has often proved difficult to discern actual momentum, especially when it comes to the largest retail banks and the systems that serve their domestic markets.

Trends for Smaller Banks Because the market for core banking systems for smaller banks is much easier to understand, its trends can be more easily tracked. This market is served by a group of software vendors who specialize in more or less packaged core banking applications. The International Banking Systems Journal has been covering this market for many years and publishes a series of what it calls ―back-office systems and suppliers guides‖ that provide a profile of the vendors active in this market and a history of their product offerings. In addition, International Banking Systems (IBS) publishes an annual ―sales league table‖ that reports the number of ―new-name‖ sales achieved by each vendor and ranks them accordingly. The most recently published IBS sales league table covers 2006. The editor‘s opening comment is: ―Our annual analysis of core banking system selections shows 2006 to be verging on a 1 bumper year, with heightened activity across the board.‖ The comment suggests that in this market at least there is growing momentum. The editor then goes on to say, ―There is no doubt, having analyzed all of the core banking system sales for 2006, that there is ever more activity, in almost all parts of the globe and within all sectors. Most suppliers had a good year in terms of new name business, as recorded in the tables—indeed, almost all of the leading systems in each category gained more deals in 2006 than in 2005. In compiling the sales league table below, IBS only looks at vendors who are active in more than one territory. This means that the numbers exclude major markets that are dominated by domestic players such as the United States and Russia.

“The IBS Sales League Table 2006.‖ International Banking Systems Journal. 2006. (http://www.ibspublishing.com/index.cfm?section=SLT&action=view&id=10109) 1

Core Banking with Microsoft Technology

2

Figure 1. Global breakdown of 2006 deals Source: IBS Journal; The IBS Sales League Table 2006

Analysts hold a broad consensus that the core banking market in the United States—perhaps contrary to the rest of the world—is not showing much sign of growth. This market has been dominated for some time by a relatively small group of vendors. Many of the smaller banks use outsourced services provided by these vendors as an alternative to the traditional on-site package implementations. A large proportion of the significant number of core banking deals in the United States each year is typically associated with ―churn,‖ that is to say, banks moving between vendors, with another sizeable segment going to ―de novo‖ start-ups. TowerGroup estimates that, ―on average, 200-300 banks consider replacing their core system in a typical year [in the U.S.]. Vendors also benefit from licensing to the 100-200 de novo banks 2 opening each year, although many of these opt for a service bureau solution.‖ According to IBS: ―IBS Publishing estimates there were 875 new wins [in 2006] among all types of financial institutions—banks, thrifts, and credit unions. ... Thus, expect about four-to-five per cent of US financial institutions to decide to convert their core retail banking systems in 2007, with most activity occurring among community banks and credit unions, and little (or no) 3 activity at the top-tier banks.‖

Robert Hunt. ―In-House Core Processing for Community Banks: Vendor Consolidation Continues, But Choices Get Better.‖ TowerGroup. December 2003. p. 7. 3 ―The IBS Sales League Table 2006.‖ International Banking Systems Journal. 2006. (http://www.ibspublishing.com/index.cfm?section=SLT&action=view&id=10109) 2

Core Banking with Microsoft Technology

3

The total number of international deals reported by IBS for 2006, given these constraints, was 441, compared with 334 in 2005 and 306 in 2004—a fairly significant shift in annual growth from 9 percent in 2005 to 32 percent in 2006. It is important to understand that these numbers include all the different classifications of ―core system‖ that IBS uses, that is to say, not only retail/private banking (64), but also universal (179), wholesale (145), and a newly introduced category of specialized lending systems (53). Many of the ―wholesale‖ banking systems focus on treasury and capital markets‘ operational requirements. Therefore one could argue that the real number of interest here—if we are focusing primarily on universal/private/retail banking activities—is in fact 296. It remains to be seen how the market fared in 2007, but it is fair to assume, given interim reports from the leading vendors, that the growth trend will continue.

Trends for Larger Banks Unfortunately, it is not easy to derive clear numbers for what is happening in the larger banks. Datamonitor analyzes the top spending priorities in retail banking worldwide and concludes: ―Top projects in 2007 will remain focused on compliance and branch, but shift towards core 4 systems.‖

Figure 2. Datamonitor; Retail Banking Technology Business Trends Survey, December 2006

4

―Retail Banking Technology Business Trends Survey.‖ Datamonitor. December 2006.

Core Banking with Microsoft Technology

4

When summarizing the situation for markets in the Asia Pacific region, Datamonitor comments, ―Strong growth in the developing banking markets of Asia Pacific is prompting many upper tier banks to invest significant capital to expand into these markets. With the rise of foreign entrants, incumbents are developing new strategies [to] compete effectively, and technology 5 applications, particularly for channels and core systems, can help level the playing field.‖ Forrester has been carrying out a survey of some 50 European banks for a few years running, seeking to establish how many of them have core system replacement initiatives in place. In its most recent survey, Forrester asks, ―Is your company working on a major renewal initiative 6 regarding its financial services application landscape (e.g. banking platform)?‖ The results indicate that 53 percent of respondent banks were already executing such a strategy and 27 percent were planning to do so, while 9 percent reported already having completed such a renewal. This suggests that—at least in Europe—legacy core system replacement is now firmly on the agenda of a significant proportion of larger banks. The same study also asks respondents the following question: ―Are you already using serviceoriented architecture (SOA)?‖ Here, 56 percent of respondents reported already using SOA and 31 percent were planning to do so.

Figure 3. Forrester; European Financial Services Architecture Strategy Survey 2007

5 6

―Emerging Asia Pacific Markets Play Catch-up—Retail Banking Technology.‖ Datamonitor. December 2006. Jost Hoppermann. ―European Financial Services Architecture Strategy Survey 2007.‖ Forrester. 2007.

Core Banking with Microsoft Technology

5

Figure 4. Forrester; European Financial Services Architecture Strategy Survey 2007

It seems fair to conclude that there may be a link between these two trends and that—at least in the larger banks in Europe—SOA is seen as an appropriate strategy to tackle the longstanding issue of legacy core system replacement.

Vendors Recognize Relevance of SOA Even the vendors who supply packaged banking applications clearly recognize that SOA is relevant. In many cases these vendors themselves face a similar issue to the one faced by the larger banks, that is, the architecture of many of the most widely installed core banking packages date back to the 1970s and 1980s. One important segment of vendors is of particular interest. These vendors have chosen certain strategies for migrating their installed user bases towards a new generation of core banking systems. These strategies may give some insight into the question as to what options are open to larger banks facing a similar challenge with an in-house system. The segment in question is the installed base of IBM iSeries–based packages from such vendors as Misys (Midas and Equation), Fiserv (ICBS), Datapro (IBS), Eri Bancaire (Olympic), Fidelity (ACBS), Financial Objects (IBIS/S2), and Temenos (following the recent acquisition of Actis—the new owners of Paba/Q). This segment is affected by the steady decline in iSeries revenues reported on a quarterly basis by IBM and the resulting market perception of a platform in retreat. According to the IBS Sales League Table , the combined installed base of these and a few other regional vendors amounts to some 1426 systems sold. In reality this number will be smaller as a 7

―The IBS Sales League Table 2006.‖ International Banking Systems Journal. 2006. (http://www.ibspublishing.com/index.cfm?section=SLT&action=view&id=10109) 7

Core Banking with Microsoft Technology

6

result of mergers and acquisitions over time and also because many of these sites are or have become branches and subsidiaries of the large international banks. Almost without exception, each of these vendors has announced plans that herald a new version of the system and the possibility of a move away from the IBM iSeries platform. The vendor with the largest installed base, Misys, serves as a useful example. Misys faced a particular challenge in that it had to find a way forward for two legacy systems—Midas and Equation. Initially it attempted re-writes for both towards Java. Then, following the acquisition of a small ―breakaway‖—Trapedza—who had built a new banking application development platform, Mysis announced a new strategy. IBS reported at the time of the Mysis announcement: Where it is taken on top of existing back office systems, it could be used at the outset purely for tying together silos and disparate front office layers for tasks such as channel-based fees (different charges depending on the channel used) or product bundling. The underlying banking functionality within BankFusion could then be used to gradually replace the underlying processing systems. ―Facade, enhance, replace‖ is 8 the Misys rallying cry. Fiserv, having addressed its front-end requirements for ICBS through collaboration with Portrait that resulted in the Aperio offering, instead opted for migrating the core ICBS legacy code as a first possible step away from the IBM iSeries. It used a set of tools from code migration specialists PKS and initially targeted Linux through a conversion to C. In addition Fiserv has made a number of acquisitions that have added specialized services, such as an antimoney-laundering service through the acquisition of NetEconomy. Temenos, on the other hand, having recently acquired Actis and its Paba system, which is installed in a large number of smaller banks in Germany, was reported by IBS as saying: Temenos will support current clients of Actis.BSP‘s Paba/Q (an iSeries-based universal banking solution used mainly by international operations) and BSP Trade (a securities 9 system). However, Temenos will look to move the clients to its own T24. To summarize, the approaches range from code migration to front-end replacement and gradual or more aggressive replacement with a new core banking system, with the possibility of integrating some entirely new and typically externally acquired capabilities.

Trends for the Future Datamonitor, in a study carried out in the U.S. market, asked the following question: ―Which of the following best describes your approach to core systems IT development?‖ It offered the following alternatives (the order indicates the preferences for this market at the time of the study.): 

Maintain existing system going forward



Wrap existing core systems to enable greater integration



Migrate to a new packaged core system (in-progress or planned)

10

Whybrow, Martin (editor-in-chief). ―Misys Unveils Product Strategy.‖ International Banking Systems Journal. Issue 16.7, April 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=10140) 9 Whybrow, Martin (editor-in-chief). ―Temenos Gains German Presence with Actis.BSP Deal.‖ International Banking Systems Journal. Issue 16.7, April 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=10143) 8

Core Banking with Microsoft Technology

7

One option missing from this list is the one perhaps that may prove of most interest for larger banks in the future: the gradual replacement of legacy core systems using an SOA-based approach, one ―service‖ at a time, and using business process management (BPM) technologies to achieve a more dynamic core banking platform. An indication that some of the international vendors are starting to think in this direction can be found in their announcements about the adoption of BPM. I-Flex is one of the leading vendors in the IBS Sales League Table and earlier acquired by Oracle. When it announced in 2006 that it was unveiling a ―process framework for banking,‖ based on the Oracle Business Process Architect (derived from IDS Scheer‘s ARIS), it triggered the start of a race for other vendors to look at their offerings in terms of services that could be orchestrated by a Business Process Execution Language (BPEL) engine. One of the vendors, Temenos, (I-Flex‘s main rival at the head of the IBS Sales League Table) reacted and duly was reported by IBS in 2007 as using the same set of tools in a project with a bank in Lebanon, which clearly indicates its intentions: ―While Temenos has a layer within T24 to expose processes and enquiries as web services ... the BPEL engine will orchestrate the flows 11 vertically, within T24, but also horizontally, across other systems.‖ One of the most recent and perhaps most significant signs of a growing trend towards specialization of services—this time by a much larger bank—came with the Microsoft press announcement in 2007 at Sibos (the annual SWIFT convention): Spain‘s Grupo Santander plans to use Microsoft technology to upgrade and consolidate payments systems across its international business operations. Santander will use a number of Microsoft products to consolidate individual payments systems from multiple mainframe computers into one homogeneous IT infrastructure.

―Core Systems in U.S. Retail Banking.‖ U.S. Financial Services Technology Survey. Datamonitor. January 23, 2004. Whybrow, Martin (editor-in-chief). ―BLF to Pioneer Oracle Tools with Temenos' T24.‖ International Banking Systems Journal. Issue 17.3, November 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=11213) 10 11

Core Banking with Microsoft Technology

8

Business Drivers: Moving Toward Agility If legacy core banking migration is gaining momentum, then it is important to understand the business drivers that are making it possible for CIOs to gain approval from business managers to undertake these typically expensive and high-risk projects. In their 2005 survey of 147 senior executives in 17 countries, SAP and Accenture reported ―flexibility‖ as the biggest single issue with legacy core banking systems, followed by ―cost‖ and ―integration.‖

Figure 5. Percentage of Executives Citing Area as Problem Source: “Redefining Core Banking.” Accenture and SAP Core Banking Survey 2005

Core Banking Systems Face Challenges For a long time, the strategy of CIOs has been to ―surround‖ legacy core banking systems in an attempt to overcome some of the highest priority issues faced by the business. These issues have typically been associated with giving customer-facing staff access to a consolidated picture of the relationship with the customer in order to improve customer service and to realize the opportunity for cross-sales. Banks also wanted to give a more consistent customer experience across the different channels to market.

Core Banking with Microsoft Technology

9

As a result, the implementation of CRM and multi-channel integration architectures has been a popular way to surround legacy core banking systems. Unfortunately, these approaches are unable to overcome some of the more fundamental issues that legacy core systems face, such as the presence of a lot of batch processing, which makes 24-hours-a-day, 7-days-a-week availability—a priority requirement in a multi-channel world—prone to inconsistencies between channels. Another typical issue that limits what banks can achieve with a surround strategy is the time it takes to bring new products to market. Legacy core systems were not typically designed with the concept of parameterized product definition in mind, which means that the introduction of any new products or even product variants results in a significant amount of changes to the core system code. Given the risks this entails and the resulting testing effort, it is not uncommon for banks to only be able to manage one or two new core system releases each year—something that in turn limits their ability to launch new products. In a similar way, legacy core systems place significant constraints on optimizing processes because these processes are typically written into the code and any process optimization again results in extensive code changes and the associated regression testing cycles. The inability to change processes in a more dynamic way can also have a clear impact on the way banks address regulatory compliance, when changes to a number of different systems are required every time a new regulation is introduced or an existing one modified. Overall, this means that the constraints of legacy core systems affect each of the key dimensions by which banks establish competitive advantage: 

Customer relationships and service



Product innovation



Operational efficiency and price

Worse, it likely has a negative effect on the bank‘s ability to respond to regulatory requirements in a cost-effective way. Given that compliance-related investments are nondiscretionary, the resulting costs can have a negative impact on the bank‘s overall cost/income ratio.

Using Agility to Resolve Issues The term that ties together many of these issues and has become closely associated with legacy core banking system replacement is ―agility.‖ ―Agility‖ in this context refers to how a business looks for a way to implement a newgeneration core banking platform that makes it possible to bring new products to market more quickly, make them available simultaneously across a multitude of distribution channels, and fine-tune processes on a continuous basis as the bank‘s people learn or regulators impose new ways of managing risk and improving customer service. A further dimension of agility is the organization‘s ability to work with partners. As many banks grow, their business focuses increasingly (where regulators allow it) towards a ―universal financial services‖ model that includes other offerings such as insurance and investment products and services, alongside traditional banking products. With this new model, the ability to accommodate products sourced from partners within the core banking platform and multichannel architecture becomes ever more important. Core Banking with Microsoft Technology

10

As the differentiation becomes sharper between those who specialize in the manufacturing of products and those who focus on distribution, and as the concept of outsourcing elements of the value chain (something that has already been in existence for some time in areas such as card processing and trade finance) becomes more widely accepted, agility can also refer to the way that banks are able to make frequent changes in the choice of partners that they collaborate with in order to deliver products and services.

Core Banking with Microsoft Technology

11

Core Banking Redefined Before setting out a future vision for a core banking platform that can meet the competitive demands of the business, it is important to first define what is meant by a legacy core banking system.

Uncovering the “Core” of Core Banking SAP and Accenture collaborated (under the auspices of EFMA, the European Financial Management and Marketing Association) on a worldwide survey of legacy core banking 12 platform renewal in 2005. In the survey, they state: The survey explicitly defined core banking as the sum of all IT components that allow a banking institution to develop, process, and manage its basic financial products and services effectively. These include: 

Basic client data



Deposit accounts



Loans and mortgages



Payments



Cards

They may also include: 

Complementary products and services, including those from external providers



Securities (in some countries)



Workflow and business enablement systems

The survey offers a fairly broad definition of core banking that recognizes that what is considered ―core‖ may differ from organization to organization and may reflect the main focus of the business. For banks with a wholesale banking focus, the emphasis may be different than for retail banks. By comparison, Datamonitor, reflecting a typical retail focus, formally defines ―core system‖ as follows: Core system includes the deposit processing system, the loan accounting and servicing system, the general ledger system, the customer information system and the reporting 13 tools. A typical example of a class of back-office systems that is not mentioned by earlier definitions of core banking is the class of systems that process domestic and international payments. Yet this is an area that is receiving particular attention as a result of regulatory changes in Europe under the Single European Payments Area directive (SEPA).

12 13

Balgheim, Thomas and Jean-Marc Olagnier. ―Redefining Core Banking: Worldwide Survey.‖ EFMA, SAP, Accenture. July 2005. p. 5. ―Core System IT Spending in North American Retail Banking (Databook).‖ Datamonitor. May 2006. p. 8.

Core Banking with Microsoft Technology

12

The International Banking Systems Journal offers an even broader perspective when it tracks international software vendors for its Sales League Table and Back Office Systems and Suppliers Guide. The league table is subdivided into products classified as systems for universal, retail/private, and wholesale banking, with a recently added class for lending systems. This is how Temenos, one of the leading vendors in the IBS Sales League Table, describes its product T24 in functional terms:

Core Functions

Retail Banking

Private Banking

Treasury

Corporate/ Wholesale

Customer Relationship Manager

Equities and Bonds

Securities

Money Market

Portfolio Management

Foreign Exchange

Commercial Lending

Market Risk Credit Risk Accounting and General Ledger Multi-company, Multi-currency, and Multilanguage Management Information and Profitability Document and Image Management Payments Nostro Reconciliations Confirmation Matching Workflow

Cash Deposits and Accounts Asset Management: Discretionary and Advisory Portfolio Rebalancing Performance Reporting Portfolio Management and Accounting

Portfolio Modeling and ReBalancing Portfolio Reporting Including Performance Fiduciaries Intermediary (Agent) Compensation and Commissions

Derivatives Securities Repos Futures and Options

Syndicated Lending Letters of Credit Documentary Collections Bills Guarantees and Standbys Leasing Cash Management

Execution-Only Transaction Alternative Instruments Structured Products Third-Party Commissions and Trailer Fees

Collateral Source: Temenos (www.temenos.com)

Microsoft considers all back-office systems as potentially being within the scope of a legacy core banking systems renewal strategy.

Core Banking with Microsoft Technology

13

Vision for the Future: A Transformation Roadmap Having reviewed how banks and software vendors define core banking, it makes sense now to have a look into the future to try to determine what the end-state looks like for a legacy core system transformation roadmap. Microsoft‘s vision for Core Banking can be summarized as the emergence of a new generation of agile banking platforms with flexible product definition, customizable workflow, and integrated multi-channel distribution capabilities, built on SOA principles and using industrystandard communication protocols and vocabularies.

Figure 6. Financial Services Reference Architecture

At the heart of this vision lies the belief that the vendors of packaged core banking applications and the larger banks who continue to build in house will evolve the architecture of their banking platforms towards a collection of reusable ―banking enterprise services‖ organized around a clear differentiation between the manufacturing and distribution of banking products. Such services are likely to include highly configurable functions to support such things as relationship-based pricing, production of customer documents, limit monitoring, or the generation of accounting entries.

Core Banking with Microsoft Technology

14

Surrounding Core Banking Systems Microsoft looks at technology from a ―People Ready‖ perspective—recognizing that it is people who develop customer relationships, improve operations, build partner connections, and drive innovation. As a result, Microsoft technologies have often been used in the past to ―surround‖ legacy core banking systems. Historically, this trend started in retail bank branches, where, during communications outages, the need to continue to serve customers and then process in ―off-line mode‖ mandated the use of low-cost decentralized processing capacity. A similar requirement existed (and still does) in another distribution channel, the automated teller machine (ATM). With the advent of the Internet and mobile devices as important distribution channels for the financial services industry and the availability of a single development environment that can address all of these different channels, the Microsoft Visual Studio® development system and Microsoft .NET have increasingly been chosen more often for multi-channel integration projects. The European Financial Management and Marketing Association, in its annual Banking Advisory Council report on distribution strategies, comments: ―A change in the role of the branch, from being transaction oriented to advice oriented, brings with it a change in the role 14 of key people in the branch.‖ It is precisely this need for a people-centric approach where Microsoft plays an increasingly prominent role in surrounding core banking ―manufacturing‖ systems with ―distribution‖ systems that incorporate collaborative and unified communications technologies. The EFMA report also comments: ―A major issue is transforming and training branch staff to take on and excel at an advisory and sales role.‖ This report reflects the opinions of the members of the EFMA banking advisory council (all of whom are senior business decision makers from leading financial services organizations across Europe). It strongly indicates that as branch transformation programs progress towards more focus on customer relationship management and sales, so also the need to support the people in branches with collaborative and communications technologies is increasingly being recognized. Microsoft Dynamics™ CRM business software is rapidly gaining momentum in the financial services industry because it addresses some of this requirement by bringing easily accessible CRM technology to people who are making the transition from a transaction-centric role to a customer relationship, advice, and sales role. Another area where Microsoft technology is providing the basis for solutions that surround legacy core banking systems is in formalized document management and workflow—an increasingly important requirement for compliance purposes—based on Microsoft SharePoint® technology.

―The Future Role of the ‗Bank Store‘ and Its Interconnectivity with Other Channels.‖ EFMA (European Financial Management and Marketing Association). 2007. p. 5. 14

Core Banking with Microsoft Technology

15

Mission Critical: A New Perception Any technology platform which is positioned to support core banking operations, needs to address a set of mission-critical criteria, including: 

Reliability



Scalability



Availability



Manageability



Security

Microsoft believes that it is important to add these: 

Enhanceability



Timeliness

Recent years have seen a significant shift in the way Microsoft technology is perceived when it comes to mission-critical operations. This change in perception has been based on a combination of three things: the launch of a 64-bit Datacenter Edition of the Windows Server 2003 operating system complemented by SQL Server 2005 database software, the number of hardware vendors who now provide a highly scalable (up to 64-way) platform for this operating system and database combination, and the number of ISVs who now offer packaged core-banking applications based on Microsoft technology.

SAP For example, SAP has seen a significant change in the platform of choice for new SAP implementations (Figure 7).

Core Banking with Microsoft Technology

16

SQL and Windows – The Platform Of Choice For New SAP Implementations • •

65% of all new SAP installations based on Windows 42% of all new SAP installations on SQL Server

28

Figure 7. Percentage of SAP installations on Windows and on SQL Server Source: SAP

In response, a benchmark exercise was carried out with HP in December 2005 (Figure 8). The highlights of this benchmark exercise showed beyond doubt that the transaction volumes that can be processed on the Windows platform can address the needs of the largest retail banks worldwide. The benchmark reported throughput of 2,300 transactions per second and end-of-day batch processing capacity of 4,270,000 balanced accounts per hour.

Core Banking with Microsoft Technology

17

Figure 8. SAP Standard Application Benchmarks Source: SAP

Itanium Solutions Alliance The Itanium Solutions Alliance brings together some of the most trusted names in high-end computing and is aimed at driving coordinated development and support for Itanium-based solutions. Members include Bull, Fujitsu, Siemens, Hitachi, HP, NEC, Unisys, and, of course, Intel. One of the resources offered by the alliance is a global network of centers to facilitate remote porting and testing of applications. On January 26, 2006, the Founding Sponsors of the Itanium Solutions Alliance publicly committed to investing $10 billion in Itanium-based solutions over the remainder of this decade. That investment will continue to drive advances at every level, from processor and systems development to ongoing application porting—and it does not include the parallel investments that will be made by many smaller platform vendors

Core Banking with Microsoft Technology

18

and by leading software and solution providers in support of Itanium-based 15 solutions. Microsoft is a member of the Itanium Solutions Alliance. In 2006, IDC reported on the availability of scalable servers running the Windows operation system: The process of IT transformation built on a new generation of hardware and software products will result in both scale-up and scale-out server deployments. In some cases, customers will choose to link multiple servers with clustering or grid software to support a given workload. In others, the processing power of larger, scalable servers will be needed to support large single system image (SSI) databases or to ensure the highest levels of availability and manageability for mission-critical applications. IDC worldwide server data shows that servers using Windows generated about U.S.$16 billion in customer revenue in 2004. Based on IDC‘s latest annual forecast, the Windows-based server segment is expected to grow to $23 billion in 2009 and to become the largest single operating system–defined segment of the worldwide server market. Windows technology now runs on servers across all three categories of the worldwide server market, as follows: 

Millions of units are sold annually in the volume server market, which comprises servers priced at less than $25,000. Most of these units are 1-way or 2-way systems.



Tens of thousands of units are sold annually in the midrange and enterprise server market, which comprises servers priced from $25,000 to $499,999. Most of these units are 2-way to 8-way servers.



Many hundreds of units are sold in the high-end enterprise server market, which comprises servers priced at $500,000 or more. Most of these units are larger than 8-way servers.

With the entire computing ecosystem in the worldwide server market moving to 64-bit and multi-core processor technologies, the capabilities of underlying server hardware based on new processor technology to support mission-critical enterprise workloads have improved, and this improvement in turn has brought Windows workloads to a new level of capability within the enterprise data center. As a result, servers running Windows are now available to take on enterprise workloads that traditionally have been assigned to midrange and high-end servers based on RISC and CISC architectures 16 and running a variety of operating systems other than Microsoft Windows.

Mainframe Migration Alliance The Mainframe Migration Alliance (MMA) is a group of companies that are working together to help customers migrate workloads from the mainframe and to the Windows platform. The MMA represents a group of companies that have their interests aligned in making mainframe migrations easier and more efficient for customers. ―The End of the Proprietary Era: Itanium 2–Based Solutions Are Changing the Economics of Business-Critical Computing,‖ Intel. April 2006, p. 11. 16 Bozman, Jean S. and Matthew Eastwood. ―Scalable Windows Servers for the Datacenter.‖ IDC. March 2006. (http://www.itaniumsolutionsalliance.org/news/whitepapers_brochures/IDC_Scalable_Windows_Servers_for_the_Data_Center.pdf) 15

Core Banking with Microsoft Technology

19

Core Banking with Microsoft Technology

20

Figure 9. Members of the Mainframe Migration Alliance

Mission Critical Program In recognition of the growing adoption of Microsoft software for truly mission-critical applications such as core banking, Microsoft Services has created the Mission Critical Program. Its mission is outlined as follows: The Microsoft Mission Critical Program (MCP) is a set of premium enterprise, solutionlevel service and support offerings that address enterprise customer needs for high availability, performance, and supportability for their Microsoft-based mission-critical applications. Delivered with qualified MCP partners, the MCP helps ensure that Core Banking with Microsoft Technology

21

mission-critical applications that are based on Windows are architected, designed, developed, implemented, operated, and supported to increase the quality and maintainability of the solution for the life of the solution. The MCP delivers the confidence that data center class systems will achieve target levels of availability and performance based on Microsoft and industry best practices. The MCP is a shared commitment and contribution to customer success from Microsoft for mission-critical 17 IT systems. MCP engagements are available on a case-by-case basis, depending on requirements, and the service is custom priced. Engagements are designed for continuity across the development life cycle.

Figure 10. MCP covers the complete solution life cycle of mission-critical projects. Source: “Mission Critical Program: Introduction and Overview.” October 17, 2007.

The MCP Components are: 

Solution Management o



Architecture Services o



Help ensure the system is operated using industry best practices to meet or exceed required service levels

Proactive Support o

17

Architectural and design guidance and validation by Microsoft solution and product group experts

Operations Services o



Continuity throughout the solution life cycle and Microsoft accountability for system success

A regimen of guidance, testing, and change management, designed to prevent downtime

Mission Critical Program: Introduction and Overview.‖ Microsoft. October 17, 2007, p. 1.

Core Banking with Microsoft Technology

22



Incident Management o

24-hours-a-day, 7-days-a-week solution-level support and optimized escalation process into the product groups

Windows Server and SQL Server The growing market acceptance of Microsoft technology for mission-critical operations such as core banking is based on the very substantial investments made by Microsoft in server operating system, database, and systems management technologies. The long-awaited launch of Windows Server 2008 (formerly code-named ―Longhorn‖) will take place in 2008. The following from the Windows Server 2008 Web site provides a preview of how the new releases of Windows Server and SQL Server will build on what has been achieved with previous versions. Windows Server 2008 is the most advanced Windows Server operating system yet, designed to power the next-generation of networks, applications, and Web services. With Windows Server 2008, the IT team can develop, deliver, and manage rich user experiences and applications, provide a secure network infrastructure, and increase technological efficiency and value within the organization. Windows Server 2008 builds on the success and strengths of its Windows Server predecessors while delivering valuable new functionality and powerful improvements to the base operating system. New Web tools, virtualization technologies, security enhancements, and management utilities help save time, reduce costs, and provide a solid foundation for the organization‘s information technology (IT) infrastructure. Windows Server 2008 is the most secure Windows Server yet. The operating system has been hardened to protect against failure and several new technologies help prevent unauthorized connections to networks, servers, data, and user accounts. Network Access Protection (NAP) helps ensure that computers that try to connect to the organization‘s network comply with its security policy. Technology integration and several enhancements make the Active Directory® service a potent, unified, and integrated Identify and Access (IDA) solution. Windows Server 2008 provides a solid foundation for all server workload and application requirements while being easy to deploy and manage. The all-new Server Manager provides a unified management console that simplifies and streamlines server setup, configuration, and ongoing management. Windows PowerShell™, is a new command-line interface that administrators can use to automate routine system administration tasks across multiple servers. Windows Deployment Services provides a simplified, secure means of rapidly deploying the operating system via network-based installations. And Windows Server 2008 Failover Clustering wizards, and full IPv6 support plus consolidated management of Network Load Balancing, make high availability easy to implement, even by IT generalists. Finally, the new Server Core installation option of Windows Server 2008 allows for installation of server roles with only the necessary components and subsystems without a graphical user interface. Fewer roles and features means minimizing disk and service footprints while reducing

Core Banking with Microsoft Technology

23

attack surfaces. It also enables IT staff to specialize according to the server roles they need to support. Core banking is a typical mission-critical environment that combines the need for highly scalable, Online Transaction Processing (OLTP) capabilities with an important element of largevolume batch processing and transaction history warehousing, within an overall context of 24hours-a-day, 7-days-a-week availability. In terms of mission-critical OLTP support, SQL Server 2008 builds on the momentum of SQL Server 2005: Microsoft SQL Server 2008 provides a database platform that is optimized for today‘s applications and that can scale for any size of business. It drives cost-efficiencies by dramatically reducing downtime and enabling dynamic and proactive management that significantly reduces administrative overhead. Finally, SQL Server 2008 provides a highly secure platform that you can trust with your organization‘s sensitive, businesscritical data. SQL Server 2008 focuses on four key areas to meet today‘s OLTP database needs: 

Scale and Performance. SQL Server 2008 enables companies to build a database solution with the performance and scalability capabilities that are required by today‘s applications.



High Availability. SQL Server 2008 provides a database application with alwayson capabilities, while minimizing the management and performance overhead of high-availability solutions.



Security. SQL Server 2008 provides an enhanced, secure data platform by encrypting valuable data, auditing changes to data and metadata, incorporating external cryptographic keys, and encrypting and signing data in backup files.



Manageability. SQL Server 2008 helps companies to reduce the time and cost of managing their data infrastructure by providing innovative and automated policybased administration and improved tools for performance monitoring, 18 troubleshooting, and tuning.

Service-Oriented Architecture It is clear from an analysis of market trends that many large banks see SOA as the correct architectural approach to modernizing and replacing legacy core systems in a gradual way. Microsoft advocates a ―real-world‖ approach to SOA, which aligns well with the desire of larger banks to approach the migration away from legacy core systems in this way. This real-world approach stands in stark contrast to a potentially disruptive ―rip and replace‖ approach associated with the implementation of a complete core banking solution, and it is likely to be more appropriate for larger banks. On the other hand, a real-world approach also tries to avoid a pure top-down approach that does not take into account the existing IT infrastructure. As a result, it can take a very long time to be implemented, by which time business requirements are likely to have changed. ―Online Transaction Processing in SQL Server 2008.‖ Microsoft. August 2007, summary and p. 1. (http://www.microsoft.com/sql/techinfo/whitepapers/sql_2008_oltp.mspx) 18

Core Banking with Microsoft Technology

24

At the same time, a real-world approach tries to avoid a pure bottom-up approach that leaves the initiative entirely to developers to create small-scale services on an ad-hoc basis. Working with the New “Middle-Out” Approach Microsoft advocates a real-world, or ―middle-out,‖ approach in which SOA efforts are driven by a combination of long-term strategic vision and short-term business needs and priorities. The aim in this approach is to identify an iterative series of SOA projects, each of which is limited in scope and delivers clear benefits in a relatively short period of time.

Figure 11. The Microsoft Middle-Out Approach to SOA

The middle-out approach is a successful hybrid of the top-down and bottom-up approaches. Business drivers and strategic vision are first used to set clear direction and priorities. Based on these, the organization takes multiple iterative steps to build out areas of end-to-end capabilities, with each iteration delivering new, dynamic applications back to the business for immediate benefit. Such a strategy results in a roadmap that can be deployed in incremental steps. Once the business drivers are defined, the process of implementing the technology can begin. Based upon the clearly defined and prioritized vision, each implementation project is an iterative one of creating (―exposing‖) new services, aggregating (―composing‖) these services into larger processes, and making these services available for use (―consuming‖) ubiquitously. Microsoft has successfully helped customers with their SOA efforts since 1999, when it first announced its Web services model and followed up with the release of the Microsoft .NET Framework together with a set of SOA tools and design approaches built into and supported by its application platform. Since then, Microsoft‘s real-world approach has helped organizations of all sizes optimize their business processes and realize greater agility through the use of SOA design principles, best practices, tools, and technologies. Guidance for both customers and partners on how to build and implement an SOA roadmap is available from a number of sources, including Microsoft Patterns and Practices, the Mission Critical Program, and the Financial Services Industry team‘s initiatives such as the Banking Integration Factory.

Core Banking with Microsoft Technology

25

Looking at an SOA Roadmap In order to identify which ―banking enterprise services‖ to focus on, it is worth looking at a typical banking SOA roadmap (Figure 12). Historically, banks have built up a number of processing silos as new product lines were added to the original core business. That means that most banks today are likely to have separate systems to deal with deposits, loans and mortgages, and cards. They invariably have separate systems when it comes to the areas of corporate and investment banking. In many cases they also have externally provided products such as insurance, which are based on collaboration with partners. Over time, a number of distribution channels were added, some of which may initially have been associated with a single business line, as was often the case with call centers and credit cards. Then, gradually the bank‘s need to serve customers across all distribution channels resulted in a multitude of cross-connections between these channels and the different product silos.

The Journey to SOA in Banking Branch

Call Centre

Internet

Mobile

Agent

...

Distribution Channels

Document

Regulator

...

External

...

Fees

u s

ANO

Clearing House

Insurance

Limit

Pensions

SWIFT

P r o c e s B s

Mutual Funds

Payment

Cards

Credit Bureau

Middleware S e r v i c e

Loans

Customer

Deposits

Insurance Partner

...

Product Engines General Ledger BI – Risk – Profitability – Statutory Reporting

Internal

Figure 12. Microsoft SOA Roadmap for Banking

Often the first step on the SOA roadmap is to separate distribution from manufacturing by introducing application programming interfaces (APIs) into the back-office systems and making their functions available as services. These can then be connected to by distribution systems through a variety of different types of ―middleware.‖ This is equivalent to the ―expose‖ part of the middle-out approach. This approach by itself can lead to a form of desktop integration often referred to as ―composition.‖ Composite applications are a particular aspect of SOA that is an area of specific interest to Microsoft, for the reason that composite applications are concerned with orchestrating services at the level of the user interface. The user interface of Microsoft software is undoubtedly the Core Banking with Microsoft Technology

26

most widely used and familiar one in the world. As a result, it makes sense to consider how to enable the integration of new services into an already familiar user interface. This is in effect what Office Business Applications makes possible. A good example of this approach comes from the world of enterprise resource planning (ERP) and the collaboration between Microsoft and SAP that resulted in the delivery of Duet. Duet in essence makes available common SAP enterprise services—such as booking a holiday—within a familiar Microsoft Office user interface. This approach was also the basis on which Microsoft added CRM capabilities to the existing, familiar user interface of the Microsoft Office Outlook® messaging and collaboration client and in turn the reason why Microsoft Dynamics CRM offers specialist or vertical financial services as well as in-house developers the ability to add capabilities on top of a largely horizontal CRM infrastructure. Office Business Applications make available a range of capabilities within the Microsoft Office environment so that additional services can be added, such as transactional ones. These capabilities include: 

Business data catalog



Extensible user interface



Open XML file formats



Workflow



Search

If we apply this logic and approach to banking in general and core banking enterprise services in particular, then it is easy to see that for those people in the bank who are already familiar with and use the Microsoft Office user interface for the majority of their time, it makes sense to consider adding the additional transactional services they require to this familiar user interface. The case is most compelling for those people—such as advisors or salespeople—who deal with customers on a day-to-day basis and use functions such as chat, e-mail, calendar, word processing, and Microsoft Office Excel® spreadsheets for much of the time. This is especially the case where these people have a mobile role, which means that they may be working disconnected from the network from time to time. This approach has also been used in other specialized areas such as the call center, where the Microsoft Customer Care Framework enables a similar desktop integration capability aimed at making it easier for call center agents to access information from a multitude of systems. Unfortunately, the functionality available as ―services‖ from legacy core systems has several associated issues. First of all, the resulting services may not be of the right granularity, making it necessary to combine too many separate service calls to achieve a single step in a process. In addition, many back-office systems duplicate common functions, resulting in the complex issues of keeping different systems synchronized and inconsistencies as to what data or even what format of data is required. For this reason, SOA roadmaps are now starting to incorporate the extraction of these common banking enterprise services from legacy core systems as an important next step. In a way, this is nothing new. Banks have long been accustomed to accessing external services from service providers, such as credit bureaus and clearing houses, or the providers of specialist Core Banking with Microsoft Technology

27

real-time market data. The area that was often addressed first when it came to recognizing the need for similar internal services was customer information. It is relatively easy to make a business case for managing customer data in a more coordinated way, and it is easy to deliver immediate business benefits from enriched customer information and better processes for managing customer interactions (such as complaints or interactions that result in sales leads). Many CRM initiatives resulted from this line of thinking. In the same way, regulation—at least in Europe—is driving a similar approach for payments. Putting in place a single payments infrastructure, or service, can be the basis for achieving significant business benefits, such as reduced transaction costs through better automation and fewer errors. It can also provide new capabilities such as more sophisticated cash flow projections and the timing of the release of payments. Meanwhile, specialist software vendors are gradually beginning to address many more such enterprise services in areas such as relationship-based pricing, origination, customer document production, or limit monitoring. Business Process Management The section on Market Trends earlier in this paper discussed the announcements by leading vendors of the implementation of BPM initiatives to start making it possible to orchestrate core-banking services. Microsoft defines the scope of BPM technologies as broadly encompassing the following capabilities and products: 

Technologies for defining and executing human workflows, which are processes that connect people. Providing automated support for human-oriented processes is a fundamental aspect of BPM, as are the graphical tools used to define those processes.



Technologies for defining and executing system workflows, which are processes that connect software. Supporting these automated interactions among applications is another fundamental part of BPM, and it again includes graphical tools to define those interactions. Integration technologies are often included here as well, such as adapters for connecting to diverse systems and tools for defining data transformations. The ability to combine human and system workflows is also important, since many business processes involve both.



Business rules engines (BREs). If decisions made by a business process can be expressed as a set of rules, a BRE can frequently be used to make those decisions in software. Doing this can help decision making be faster, cheaper, and more consistent.



Business activity monitoring (BAM). The people who rely on a business process can often benefit from visibility into currently running instances of that process. BAM provides this visibility, exposing relevant information about running processes in terms that are meaningful to the information workers who use it.



Process description tools: Having a clear understanding of a business process commonly starts with a picture of that process. Graphical tools for illustrating the actions and relationships in a process are useful for creating this picture.

Microsoft‘s primary BPM technologies fit quite well into these five categories. Those technologies are the following:

Core Banking with Microsoft Technology

28



Human workflow: Windows SharePoint Services and Microsoft Office SharePoint Server.



System workflow: Microsoft BizTalk® Server, which provides integration services as well. It can also be used with Windows SharePoint Services and other products to create combined human and system workflows.



Business rules engine: The BizTalk Server BRE. Microsoft also provides a rules engine with Windows Workflow Foundation, part of Microsoft .NET Framework 3.0.



Business activity monitoring: The BizTalk Server BAM, together with technologies such as Microsoft Office Excel and Office PerformancePoint™ Server business intelligence software for displaying BAM information.



Process description tools: Microsoft Office Visio® drawing and diagramming software.

In other words, Microsoft encompasses within BPM both human workflow and system workflow—sometimes also referred to as process flow—and has been implementing a strategy to unify both types of workflow into a single workflow engine: the one which is now part of the .NET development environment. A good example of what this means can be seen for document-centric workflows, which can be defined by end-users through a specialized user interface that is part of workflow development in Microsoft Office SharePoint Designer (Figure 13).

Core Banking with Microsoft Technology

29

Figure 13. Workflow Designer user interface in Microsoft Office SharePoint Designer

In order to apply these technologies in the context of migration to a next-generation core banking platform, a number of prerequisites need to be addressed first. Often the first step consists of making legacy system transactions available as ―services‖ by removing their user interface and making them accessible using a standard protocol. However, the ultimate objective of an SOA-based approach is likely to go beyond this and start to introduce a number of reusable ―services‖ that can be invoked without unwanted side-effects or unnecessary duplication. An example might be a typical branch banking transaction that involves the following standard ―services‖: 

Available balance check



Credit limit check



Calculation of fees



Production of a customer document



Generation of accounting entries

Core Banking with Microsoft Technology

30

Let‘s assume there is an existing transaction for moving funds from one account to another that uses these services. Assuming that each of these services is available as a reusable and flexible ―enterprise service,‖ then it would be relatively easy to introduce a new transaction— perhaps a funds transfer between two accounts in different currencies. This may require the addition of two services not previously used but originating in and available from the bank‘s treasury department. 

Currency conversion



Currency position update

This does mean that such enterprise services need be designed much in the same way that software vendors design packages that must be capable of being implemented in many different organizations in different geographies and under different regulatory regimes. In this case, it means that the services must be aware of the need to accommodate different currencies. In fact, should a new requirement arise that is not currently addressed by an existing service (for example the pricing service cannot cope with different currencies) and assuming a serviceoriented architecture has been put in place, it then becomes possible to consider whether it is more cost-effective to enhance the existing in-house service or to buy a specialized one from a software vendor instead. It is also clear how—once such a set of services is available—the associated process can be enhanced significantly by means of workflow and business rules. Let‘s say, for example, that a regulatory requirement is introduced that mandates that funds transfers into a foreign currency are subject to a maximum amount, beyond which they become subject to the need for review and approval by a manager in the bank. Given that the amount may change over time, it makes sense to implement this compliance rule using a business rules engine so that when a change is introduced in the future, it will not be necessary to make any code changes to implement it. In the same way, the referral to a manager may be implemented as a human workflow so that when the rules about who is authorized to make such a decision change over time (for example, when a new independent compliance manager role is introduced), these changes can again be implemented without necessitating code changes. Another benefit from the use of this approach to building new transactions is that it becomes possible—using Business Process Execution Language (BPEL)—to make these kinds of changes capable of being designed by a business analyst using a graphical tool such as Microsoft Office Visio. Conversely, banking operations manuals can be generated from the actual procedures, ensuring that they are kept in line more easily with the latest version of the operational systems.

Core Banking with Microsoft Technology

31

Conclusion As core system migration strategies gather momentum worldwide and larger banks start to adopt SOA-based strategies to ensure they put in place an agile banking platform for the future, Microsoft is increasingly recognized as having the mission-critical credentials to provide the platform of choice for a new generation of banking enterprise services that will complement its multi-channel collaborative and communications technologies and help ensure that banks realize a ―People Ready‖ vision.

Core Banking with Microsoft Technology

32

Resources Balgheim, Thomas and Jean-Marc Olagnier. ―Redefining Core Banking: Worldwide Survey.‖ EFMA, SAP, Accenture. July 2005. Bozman, Jean S. and Matthew Eastwood. ―Scalable Windows Servers for the Datacenter.‖ IDC. March 2006. (http://www.itaniumsolutionsalliance.org/news/whitepapers_brochures/IDC_Scalable_ Windows_Servers_for_the_Data_Center.pdf) Datamonitor. ―Core Systems in U.S. Retail Banking.‖ U.S. Financial Services Technology Survey. January 23, 2004. Datamonitor. ―Core System IT Spending in Western European Retail Banking (Databook).‖ May 2006. Datamonitor. ―Emerging Asia Pacific Markets Play Catch-up—Retail Banking Technology.‖ December 2006. Datamonitor. ―Retail Banking Technology Business Trends Survey.‖ December 2006. EFMA (European Financial Management and Marketing Association). ―The Future Role of the ‗Bank Store‘ and Its Interconnectivity with Other Channels.‖ 2007. Hoppermann, Jost. ―European Financial Services Architecture Strategy Survey.‖ Forrester. 2007. Hunt, Robert. ―In-House Core Processing for Community Banks: Vendor Consolidation Continues, But Choices Get Better.‖ TowerGroup. December 2003. Intel. ―The End of the Proprietary Era: Itanium 2–Based Solutions Are Changing the Economics of Business-Critical Computing.‖ April 2006. International Banking Systems Journal. ―The IBS Sales League Table 2006.‖ 2006. (http://www.ibspublishing.com/index.cfm?section=SLT&action=view&id=10109) Microsoft. Mission Critical Program: Introduction and Overview.‖ October 17, 2007. Microsoft. ―Online Transaction Processing in SQL Server 2008.‖ August 2007. (http://www.microsoft.com/sql/techinfo/whitepapers/sql_2008_oltp.mspx) Whybrow, Martin (editor-in-chief). ―Misys Unveils Product Strategy.‖ International Banking Systems Journal. Issue 16.7, April 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=10140) Whybrow, Martin (editor-in-chief). “Temenos Gains German Presence with Actis.BSP Deal.‖ International Banking Systems Journal. Issue 16.7, April 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=10143) Whybrow, Martin (editor-in-chief). ―BLF to Pioneer Oracle Tools with Temenos' T24.‖ International Banking Systems Journal. Issue 17.3, November 2007. (http://www.ibspublishing.com/index.cfm?section=news&action=view&id=11213)

Core Banking with Microsoft Technology

33

The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This white paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property. © 2008 Microsoft Corporation. All rights reserved. Microsoft, Active Directory, BizTalk, Excel, Microsoft Dynamics, Outlook, PerformancePoint, SharePoint, Visio, Visual Studio, Windows, Windows PowerShell, and Windows Server are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Core Banking with Microsoft Technology

34