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Short Name

Banking Digitization using Hybrid Cloud on IBM Z

Short Description

Exploit API and microservices to drive fast and agile innovation using a retail banking system on IBM Z.

Offering Type

Cloud

Introduction

Digital transformation requires rapid business reconfiguration around new business strategies to create new value for existing customers, to reach new markets and to adjust to changing business landscape. 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. API is at the core of such initiatives as it allows 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’s ecosystems.

Authors

By Alexis Chretienne

Code

Demo

  • N/A

Video

Overview

This Developer Journey will leverage the available Banking APIs published on IBM Bluemix with applications running on the IBM Z through a simulated retail bank called MPLbank. It will show Developers how they can use a hybrid cloud infrastructure (Bluemix and IBM Z) to leverage existing APIs to deliver innovative applications that use mainframe data. The journey is similar to a retail bank and is mainly constituted of an Account Management System, a Payment Hub (not shown in the schema), a Customer Management System and Machine Learning. On top of these components, an API layer hosted in IBM Bluemix has been set up in order to deliver Banking APIs, reachable from many simulated banking channels. In other words, this journey highlights a Hybrid Architecture with IBM Bluemix/IBM Z using the IBM Digital Transformation Model. Following this Model, the MPLbank applied capabilities and business benefits levels 0 (Run), 1 (Maintain) and 2 (Expose). The level 3 (Evolve) is the purpose of the IBM Developer Journey Program matching with the speed increase of application development. The benefits include fast access to data on IBM Z and services for mobile and social workloads that allows banks to quickly deliver new value to clients and to increase profits.

Flow

Banking APIs has been designed (Swagger file) and published using IBM API Connect Server hosted in Bluemix. In this MPLbank showcase, there are 3 kind of banking APIs: a. APIs managing banking customer information b. APIs managing banking account information c. APIs requesting for a loan approval.

  1. 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.

  2. 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.

  3. 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: d. APIs managing banking customer information requests the Customer Database on Mainframe e. APIs managing banking account information requests the Account Management System f. APIs requesting for a loan approval requests the credit scoring service based on IBM Machine Learning for z/OS.

Each Mainframe sub-systems here expose services though their built-in REST/JSON Interfaces except for the Account Management System. In front of this server, IBM z/OS Connect EE was set up to create REST/JSON Interfaces from COBOL programs running in CICS. In consequences, these 3 sub-systems are really flexible because they are reachable using REST/JSON API. From an High level Perspective, these sub-systems act as micro-services by delivering REST/JSON interfaces and IBM API Connect acts as API layer. It is in charge to manage as well a unique and final set of banking REST/JSON APIs as human resources like API managers, API developers, API users, API designers, etc… This hybrid architecture approach allows to build a fast and secure API Economy.

Included components

  • 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

Featured technologies

Blog(s)

The benefits of digital transformation for banks**

In the words of Stephenson & Britain (https://en.wikipedia.org/wiki/George_Stephenson) “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 (http://www-03.ibm.com/press/us/en/pressrelease/52805.wss) "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 bank 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 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 (https://developer.ibm.com/code/journey/turn-your-mainframe-into-an-api-powerhouse/) to help them use the vast amount of mainframe data without mainframe skills

TBD

Links

Digital Transformation: https://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-digital-transformation.html Systems of Insight for Digital Transformation Using IBM Operational Decision Manager Advanced and Predictive Analytic : http://www.redbooks.ibm.com/redbooks/pdfs/sg248293.pdf TBD

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