1

Enterprise Architecture
John Schlesinger, Chief Enterprise Architect, Temenos
November 2014
2
Agenda
Introduction

Bank of the Future

Placing three bets

Enterprise Architecture

Enterprise Frameworks

Conclusion

3
Objective

… of Temenos Enterprise Frameworks

To provide non-functional attributes in enterprise software that are world
class and suitable for banks from the largest to the smallest

…of the presentation

To present the current state of the frameworks, where we are investing and
what is driving further change

4
Presentation Messages

The nature of banking is changing

This change is about architecture and the

technology of banking

Temenos is uniquely investing to provide that

new architecture and technology

Temenos is positioned to be one of a few core

banking suppliers as banking changes

5
Agenda
Introduction

Bank of the Future

Placing three bets

Enterprise Architecture

Enterprise Frameworks

Conclusion

6
Four Simultaneous Revolutions in Banking

Banks are becoming online retailers

Core banking will move to the cloud

Banking is now low margin

Customers are no longer loyal

7
Becoming Online Retailers
Retail banks are moving from tellers and accounting to
self assisted transactions and front office differentiation

Bank
Marketplace

Core
Banking

This forces the front office to separate from the middle

8
Competing with GAFA

Some bankers and analysts think that

Google, Facebook, Amazon or the
like will not fully enter a highly
regulated, low-margin business such
as banking. I disagree. What is more,
I think banks that are not prepared
for such new competitors face
certain death
Quote from article ‘Banks need to take on Amazon and Google or die’ CEO of BBVA

9
Bank of 2020
Bank of 2014
Account focused
High Margin
High Volume of Transactions
Batch
High Street Retailer
Assisted transactions
Dedicated Data Centre
Front to back software
Makes money on float
Bank of 2020
Customer focused
Low Margin
Enormous volume of inquiries
Real time
Online Retailer
Self-assisted transactions
Shared Infrastructure
Separate front, middle, back
Makes money on spread
10
Characteristics of the bank in 2020

High Customer Care Mass relationship management

High Volume Internet of things
Low Margin No interchange, no float, low interest rates
Real Time Straight through

These are the characteristics of Amazon

11
Characteristics of the bank in 2020

Retail Wealth Cap Mkt GAFA

High Customer Care X √ X √
High Volume √ X √ √
Low Margin √ X X √
Real Time X √ √ √
Can a bank acquire these
characteristics before GAFA become a
bank?

12
What banks can do about it

This presentation is
about how Temenos is
preparing banks for the
‘Amazonification’ of
banking
13
Agenda
Introduction

Bank of the Future

Placing three bets

Enterprise Architecture

Enterprise Frameworks

Conclusion

14
Agenda
Introduction

Bank of the Future

Placing three bets

Enterprise Architecture

Enterprise Frameworks

Conclusion

15
3 Year Plan – Temenos’ Big Bets

Cloud

Digital

Data
16
What kind of cloud to run
Not all banks will choose the same approach

SaaS PaaS IaaS

What you get Application Middleware Tin

User Agents Database Wires

CapEx to Software Hardware

What you save OpEx Cost Cost
People People People
Cost Cost Cost

Tier 3 and 4 Tier 2 at home Tier 1 at home

Only the largest banks will still employ DBAs etc

17
Cloud – Global or Balkanised

Is it like tax?
• Balkanised
• Per regulator
Is it like credit card?
• Oligopoly
• Global

My guess is that it is like credit card

18
Cloud Architecture - Multi-Tenancy
Shared stateless binaries but multiple databases

Service Bank Bank

Manager Users Customers

Multi -Tenant
Master T24
T24

Multi-Tenant
Bank A Bank B Bank C [Co C1] [Co C2]
Master Data

Multiple owners can share a common service to

minimise costs with reduced risk
19
Digital Means Front Office

100% Self Assisted

100% Straight Through

Goodbye 4 Eyes, Hello Front Office

20
Digital Front Office
Many to Many relationship between customer care and product manufacturing

Differentiation and High Care

Channels Customer Product Transaction
Bank Bank Bank

Internet BPM Loans

CRM Africa
Mobile Content Deposits
Case Europe
API Insurance
Orders
Advisor Holdings Corporate NA/APAC

Enables Banks to avoid disintermediation and the fate of insurance

21
Data

• Most banks make little use of data

• Typically only 7% of records make it to reports
• What little data is in reports is just for MIS
• Banks need to get all their data into the front office to support
customer care
– Behavioural monitoring
– Fraud
– Decisioning
– Alerting
– Customer communications
– Information Products
– Collaboration

22
Banking and Data
Other
Temenos

T24 T24
Pub
R-0 Sub R-0
R/W R/W

Search ESB
Graph
Applications
Triple
CEP
23
Agenda
Introduction

Bank of the Future

Placing three bets

Enterprise Architecture

Enterprise Frameworks

Conclusion

24
Generic Context Diagram
ANALYTICS

Internal Use Cases

INTEGRATION Events In
MODULARITY
Partner Owned Partner
Business Business Business
System System System
Events Out

External Use Cases

REGULATION
MOBILE

25
Two Views of the Enterprise
ARCHITECT BUILDER

Interaction

Component
Owned

Platform
Data
Business
System

Integration Design

Other
System

26
A Platform of Six Frameworks

27
 28
Column
HDFS
Row

ETL

Data
ESB/MQ

Tool
Integration Component Design
Platform
AS
Unravelling the Cube

API GW
Interaction
User App
Domain Architecture

API (B2C) Gateway

App Store

Req

Req
Resp

Resp
B2B Gateway

Reporting
Insight OperationalActivity Application Server
Row
To be In Transaction Commodity
Report Column ETL
Skills DWH
In Out
Done Payments

Done
To be

Faster
Done Cheaper
ESB Done ODS
To be
To be
Done

Done
Code Free Data
To be

To be
Done

Key
Integration
Application
CEP MDM HDFS Integration
Domain
Fraud/ Party ModelTen Second
Service
Alerts COB
29
Domain Architecture for Small Bank

Servlet
Interaction Framework

Req

Req
Resp

Resp
Reporting
Insight OperationalActivity Application Server
In Transaction Platform
RDBMS Framework
Report ETL
In Out
Done

Done
To be

ESB
Integration Framework
B2B

Plus Design Framework for Model Driven Development

All Available Now (Design is in Beta)
30
 Complete SaaS Banking Service
Design Deploy Monitor Internet Mobile Teller Advisor BPM Four R Recon
Interaction
Interface

SWIFT SaaS BPO

ISO 8583 Core Banking COB
ISO 20022 Payments Reconciliation
Hi Payment Workflow Card Mgt
Lo Payment Content Statements

Mandates Case Four R

Reporting
Credit Cards
CRM
Regulatory
Clearing
Risk
Integration
Interface

Settlement
GL
DWH
31
Financial Event Side Effects

T24 TO PAYMENT GATEWAY

TO BACK OFFICE

TO FRONT OFFICE

FINANCIAL EVENT
TO RISK

TO DATA WAREHOUSE

TO GL

WE WERE DEVELOPING SIX SEPARATE SUBSYSTEMS

32
Framework Attributes
FRAMEWORK ATTRIBUTE COMMENT

Integration Agility Integration front middle and back

Interaction Usability User interfaces by role and device

Platform Flexibility Three plus one choice of stacks

Component Maintainability Online update

Design Productivity 10x MB and implementation

Data Scalability 10x faster transactions and reports

33
Framework Readiness
FRAMEWORK T24 TAP WM

Integration R9-R13 WTX based OAQ based

Interaction R13 OData R13 OData R13 OData

Platform JEE, TAFC, Azure JEE, Sybase Servlet

Component Customer, Account, TPS TBD TBD

Design DS T24 beta DS TAP TBD

Data DL done R14 TBD TBD

Delivering to the market as it is ready for it

34
Framework Investment
FRAMEWORK T24 TAP WM

Integration Adapters, Inflow WTX based Adapters

Interaction Connect, Teller UA, BRP Wealth UA Wealth UA

Platform Cloud

Component AA, Banking Framework

Design DS T24 completion DS TAP update

Data Read-only DB

Encapsulation of AA is a functional enhancement

35
Integration versus Interaction

INTERACTION INTEGRATION

36
Modular Architecture
Interaction

Req

Resp
Activity

Inbound 1
To be 2 Module B DoneOutbound
Queue In Out Queue
Flow Module A 3 Flow

37
Platform Framework
Application Server DBMS
EJB OSGi Container
Container
Interaction

InQ JMS Message

1
Driven 2
OutQ JMS Bean JDBC
Module A 3
Module B

OutQ
InQ
ENCAPSULATION

Integration

38
Integration Framework

1 Module B
In 2 Out
Flow Module A 3 Flow

Done
To be
Inbound

Outboun Done
d Queue
Queue

ESB INDEPENDENCE
To be

ESB
Routing Transformation

39
Interaction Framework

CONNECT

User Experience
Platform
User Banking
Agent Capability

Framework
Interaction
Other
Device User
Banking
Agent
Capability
User Non banking
Agent Capability BROWSER
UPGRADE

TELLER, TRADER
ADVISOR

40
Design Framework
Design Studio
T24
Introspect
Transaction

Install
Report

Deploy

Source
Banking Catalogue Control
Management

Complete supported artefacts

41
Component Framework
Interaction

Req

Resp
STATELESS
WORKFLOW
Activity

Inbound 1
To be 2 Module B DoneOutbound
Queue In Out Queue
Flow Module A 3 Flow

ENCAPSULATION

42
Data Framework

NVDB
3 1
4
1. Move. Move transactions in 2
R/W R-O Insight
near real time

2. Report. Create daily time

series with no aggregates
T24
3. Archive. Remove old data to
Transaction

Reports
Report
cheap storage

4. Report. ETL to create cubes,

graphs for reporting

DATA MANAGEMENT

43
 Data Framework and Integration

NVDB
3

1. Move. Move transactions in

R/W R-O TXN DB
near real time

2. Search. Index in near real

time for text search
T24 1
3. COB. Run MapReduce at
Transaction
Integration
ESB

Report
close of business on 1000s of Framework

servers for a 30 second close

The same events that update the Read-Only 2

Searchable
database also integrate T24 with the enterprise Text
Database
44
 Conclusion

The frameworks provide world class non-functional characteristics for

all banks, from the smallest to the largest
Build on the Temenos Unique Attributes – Platform choice, extensibility
with upgradeability and performance

Prepare our customers for the future – cloud, mobile and big data

Provide banks with the lowest possible cost per transaction in a world
where banking capability is a commodity

Keeps Temenos customers at the forefront of technology

45
Thank you
www.temenos.com
46