accenture software for banking agile development …...4 agile developement platforms for an agile...

Agile development platforms for an agile multichannel bank

Accenture Software for Banking

Banks are pushing harder than ever from a business perspective to become agile and flexible in their product development, organizational design and customer experience capability.

But such business agility requires an application development environment that is also agile and flexible. Banks and their CIOs might wish in their hearts to do a core systems replacement—to start over and build that flexibility from scratch—but that is usually a nonstarter: too long, too expensive and too disruptive to the business.

What’s needed is an approach, and an architecture, that enables banks to move beyond traditional application development—meaning, projects that can last 12 to 18 months or more. The business environment is moving too quickly. Customer demands change, competitors come out with compelling offerings, regulations keep piling on. An application that has been in development for 18 months might not even be relevant to the bank’s needs by the time it finally gets rolled out.

By designing multichannel capabilities into the IT architecture and infrastructure from the start, using new tools and approaches, banks can more rapidly address urgent regulatory requirements, accommodate business and technology change, and serve customers more effectively.

2 Agile developement platforms for an agile multichannel bank

Helping IT help the business

The past few years of information technology development have seemed to offer such promise to banks struggling to keep costs in line while developing new services to support growth: web-based capabilities, service oriented architectures, cloud computing, mobile and online channels, and more. But in many cases these technologies have not fulfilled their promise because, in reality, IT departments have had to focus primarily on just keeping the lights on.

This situation—constraints in how IT is able to serve the business—represents near-universal frustration for financial services institutions. Senior leadership sees the potential for competitive advantage through innovation and through customer-centric, multi-channel services. But those business innovations require faster development from IT—more releases on a faster timescale. And that’s usually a problem. In fact, the IT department at many banks is often forced to spend most of its time just keeping up with regulatory change—a task made immeasurably more difficult because IT infrastructures, architectures and applications have been stretched through the years by hundreds of make-do modifications to the point where underlying platforms have become inflexible and brittle.

This was the case with one bank in the United States recently which was forced by the implications of the U.S. Patriot Act to change its rules for identifying customers. That change resulted in three separate projects—for the online channel, branch channel and call center channel—because there was no common architecture to enable technical changes for one channel to ripple through all the others. Integration was difficult. The projects took time. They were costlier and riskier than they needed to be.

Accenture believes that creating an IT function that is more agile and responsive to the business involves two parallel paths of activity: first, designing a more flexible enterprise architecture; and, second, leveraging a more flexible approach to application development.

Modernizing enterprise architecture

It is important to understand that at the heart of inflexible systems is often inflexible business design—organizational structures that are siloed and fragmented. Thus, one of the primary goals of a bank looking for agility should be to simplify that structure and reduce multiple silos by putting a modern enterprise architecture in place that supports delivery through multiple channels. This has to do, in large measure, with more logical design: enabling IT and the business to work together to logically separate how the business is managed from how capabilities are presented to the individual channels.

That discipline of separation is one important step in the overall design of a flexible and responsive IT environment. An agile architecture can reduce organizational complexity. By building in frequently used components that are commonly


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used across channels, complexity is reduced. The overall environment is simplified. Change can be accommodated faster and easier from a business perspective.

Software packages are available that can help deliver such benefits, but too often they in fact end up exacerbating organizational silos because the solutions are overly channel- and host-centric. They appear to be easy in the short term, but they increase organizational complexity in the long term.

IT executives also find that many products do not provide them with the proper balance between cost and capability. Solutions may appear to support rapid development but banks that implement them, especially large banks, end up sacrificing robustness of functionality.

Creating better business flexibility also requires using development tools that help the rapid creation of smaller and more incremental sets of capabilities that can be rolled out to address immediate requirements. Again, the era of year-long or multi-year development projects is nearing an end. With rapid application development tools, banks can create common assets, or common definitions of assets, and reuse those across channels.

This approach to creating an agile architecture may appear daunting to IT managers at first because it is so unlike their current architecture designs and development approaches. It may appear to point to the need for a core replacement program which, again, is usually a nonstarter idea from a budgetary and business perspective.

But with newer, open platforms and tools, CIOs find they can actually provide significant business functionality in smaller increments. Suppose, for example, you want your customers to be able to order travelers checks through both the customer service channel and self-service online channel. That functionality may not be present in the current, monolithic system. But through tools now available in an open, SOA (defined below) architectural environment, an application can be created that both channels can use to deliver the functionality.

That application can be the starting point—the seed crystal, as it were—for the gradual addition of other related functions such as the ability to order statements. Over time, the bank’s ability to innovate and serve customers grows. The bank avoids the need to rip and replace multiple legacy systems, and it finds itself suddenly more responsive to marketplace and regulatory change.


And IT executives find themselves better able to respond to a particularly pressing charge from the C.-suite: give us shorter ROI cycles on technology. CIOs and CTOs are being asked to produce greater ROI numbers more quickly. So, the ability to deliver smaller components faster that offer significant new business functionality encourages everyone to say: You’ve demonstrated that you can do it. Keep going.

Flexible application development for better business agility

Based on Accenture’s experience with banks across the globe, the following activities are important to delivering a more flexible IT and application environment that can help support a more agile and more competitive bank.

Build in multichannel capabilities from the beginning, allowing new functionality to be added seamlessly across all channels and devices.

Banks sometimes increase the complexity of their business and IT environment by focusing on a single function or channel without looking at the implications across all channels. They risk just adding one more thing to an already complex environment. Taking a cross-channel perspective—engaging in “multichannel by design” as it were—banks avoid boxing themselves into high-cost, high-risk fixes. A multichannel-by-design approach can lead to an architecture with the flexibility to address future business needs.

Confirm scalability and performance of the platform so it can run at an enterprise level. For large banks, and even many mid-tier institutions, applications and the platform itself need to be reliable as well as scalable to support growth at predictable price points. This helps enable gradual technology evolution and innovation while also supporting business-as-usual operations.

Extensible platforms can leverage some of the latest developments in architecture design and technology including multi-tiered systems, service oriented architectures (SOA), Business Process Management (BPM) and Rich Internet Applications (RIA). Such a platform is implemented on top of open standards to facilitate compatibility of business applications, which also helps drive overall agility.

Focus on platform independence, which mitigates the risks of lock-in to specific vendors and technologies. Of course many long-accepted platforms and solutions are in the marketplace, but CIOs should think carefully about the choices they make. This is another dimension of the overall tradeoff between robustness and cost. A traditional enterprise solution offers comprehensive capabilities, but at what sacrifice to future adaptability? When locked in to a platform or technology, the cost of switching can be high—literal costs as well as potential disruptions to the business. Focus should be placed, instead, on choosing solutions with choice and flexibility at the core.

Create an architecture that confirms interoperability of applications. As noted, banks cannot generally afford replacement of core systems, so support for incremental evolution of applications is a must, while retaining and even extending the value of legacy investments. The new applications need to be interoperable with existing technologies and applications. The integration effort should be focused at multiple levels—the user interface level, to an information/ integration hub, and down to the core system level itself. A bank that has an existing rules engine for the business has to be able to continue using that. Incremental functionality needs to be built into existing applications, bringing new capabilities into operation without the need to rebuild existing channels.


In sum, application development should adapt to the business, not the other way around.

Leverage a strong user interface development capability. A strong user interface development capability is essential because today’s IT environment now generally involves customer- or employee-facing applications.

User interfaces are undergoing rapid evolution—from function-based to process-based user experiences. It is vital to guide users, internal or external, through the steps that enable them to fulfill their intentions. Effective user interface design enhances the experience and also improves the efficiency of the process. The user interface actually now has more profound business implications than ever. The effectiveness and usability of a bank’s online and mobile channels are now an important factor in how customers think of the bank’s brand itself—especially as customers use online channels more and physical branches less.

Use an information/integration hub for development. An information/integration hub enables the decoupling of front-end and back-end capabilities through the creation of atomic services that are linked together to form business-relevant services such as “create a customer.” More flexible development requires efficient capabilities to implement the new and orchestrated services required to deliver the business functionality contained within the hub.


Banks that select the appropriate multichannel architecture, one with rapid development tools and prebuilt components, will have a significant competitive advantage.


Conclusion: Channel flexibility for the long term

Banks are often forced to make quick fixes to their IT systems and applications, and those often add additional rigidity to the business. A change is made to address an immediate requirement but, over time, such changes add complexity and make IT less flexible and responsive.

Savvy banks need to focus more on designing their business capabilities and IT architectures to be inherently agile—knowing that the number-one objective has to be staying flexible to support the increasing demands of customers and the rapidly changing needs of the business.

Channels to the customer will become richer and more diverse. Designing with that diversity in mind will increasingly become important to success, as will be overcoming siloed environments that restrict the development of a diverse range of channels. Banks that select the appropriate multichannel architecture, one with rapid development tools and prebuilt components, will have a significant competitive advantage.


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About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 259,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

Accenture Software combines deep technology acumen with industry knowledge to develop differentiated software products. It offers innovative software-based solutions to enable organizations to meet their business goals and achieve high performance. Its home page is www.accenture.com/software. For Accenture Banking software, its home page is www.accenture.com/bankingsoftware.

accenture software for banking agile development …...4 agile developement platforms for an agile...

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