SOA: Adding rational wings to centralized data

Author: Chen LAN, AMT Research Institute

In the face of the wave of globalization and the challenges after China's accession to the WTO, especially the aggressive momentum of foreign banks, the informatization of the banking industry is always at our fingertips, ICBC, China Construction Bank, and other powerful data centers have successively released a complete set of information solutions. The "information data centralization" involves a wide range of fields, a huge investment, and far-reaching impact, which is also the most eye-catching.

Recently, the informatization process of China Construction Bank has been accelerating, and the centralized data project (hereinafter referred to as the "DCC project"), as the core part of informatization construction, is about to enter the final stage. The DCC project of China Construction Bank is expected to be fully completed by the end of September. By then, 38 primary branches will share financial information and data.

Three potential advantages of datasets

First, data centralization can improve the overall operational efficiency of banks and reduce management costs. With the wave of financial reform and listing, China's banking industry is more concerned with the integration and management of internal and external resources. Data centralization is undoubtedly highly expected in this regard. Centralized deployment can integrate information, streamline redundancy, and reduce repetitive construction, effectively saving manpower and equipment investment.

Second, the data is centralized to achieve centralized monitoring of the Bank's business, and strengthen the Head Office's prevention of the operational risks of each branch. For example, it was difficult for ICBC to effectively monitor the non-performing loans of its branches, because it could not see what services actually happened to its branches, and what problems have these businesses encountered during the review process. After achieving data centralization, ICBC can implement pre-control, which can be done, what cannot be done, and what must be reported by branches, which will be more centralized at the management level.

Third, and most importantly, data centralization also lays a good foundation for innovation and development of financial products. An obvious example is the development of online banking. Through unified management of customer information and account data, in-depth analysis of customers and rapid business innovation can not only better retain existing customers, but also increase the user scale and increase the transaction amount.
　
Three major potential crises in Datasets

First, with the increase of system concentration, the distance between banks and customers is getting farther and farther. In the process of data collection, banks usually start from their own perspectives, uncertainty during the period, neglect of customers, and even the loss of customer data will lead to the continuous loss of customers. Data centralization is achieved at the cost of losing high-quality customers, which is an unexpected result of decision makers.

Second, the high concentration of data leads to the centralization and bureaucracy of Bank Management, and the response to customer and market needs is getting slower and slower. Both data and applications are in the master bank. The master bank cannot provide personalized services for each branch, and the branch has no ability or opportunity to provide personalized services. If the problem of differentiation cannot be solved, it is impossible to provide differentiated services for customers. After the data is centralized, the branches need to collect and analyze the data. The data must first pass through the master line, and the master line cannot provide data based on different needs in different regions.

Third, despite data centralization, some systems are still scattered, no matter the banks in the dataset or the banks in the dataset are completed. In this way, the same customer has different information performance in the same bank. No system can provide comprehensive and authentic customer information, leading to the failure of the Bank's service capabilities and quality to meet customer needs, let alone personalized services and product innovations.

SOA: Adding rational wings to centralized data

Some bankers have said that data centralization is only a means rather than a purpose. It cannot solve banking business and management problems, but provides an operational and powerful platform from the IT architecture, therefore, centralization is not the end of banking informatization. So, how can we develop strengths and circumvent weaknesses to maximize the benefits of data sets? Where is the end, and where is the road?

Some experts have suggested that Service-Oriented Architecture (SOA) should be adopted early in the Informatization Process of the banking industry ). It repeat existing resources of the enterprise, including development staff, technology, software, hardware, language, platform, database and system. According to the study report, appropriate use of SOA can reduce costs, increase resource efficiency by 40%, reduce maintenance workload by up to 10 times, reduce potential risks, and manage and monitor costs.

More importantly, SOA makes business models and IT architectures more flexible, and reconstructs an enterprise with "customer response capabilities" to face the ever-changing environment. This is an important step on the informatization of China's banking industry.

Gartner predicts that by 2008, SOA will become a Software Engineering Practice Method with absolute advantages. The informatization of China's banking industry must have a rational and high point of view, while integrating data sets, investment should be made in understanding and applying SOA development skills. Let SOA put rational wings on the centralized data.