Banking and finance today require agility, or the ability to respond quickly when the market changes or a disruptor enters the field. Fintech startups and your savviest competitors are winning customers by delivering what they want—speed. They use the cloud, modern architectures, platforms as a service, NoSQL databases, containers, data lakes, and microservices to provide the fast, high-performance engagement customers expect.
The most successful and competitive businesses in the world are digital. What do we mean by “digital?” Think of Amazon, Uber, Google, Tesla, and Rocket Mortgage. They use the latest digital and web technology to reach customers, develop products, monitor sales and transactions, analyze data, and more. Many of them have been cloud companies from the start rather than companies who have invested millions in mainframe infrastructure to be able to send out paper bills. As more businesses leave traditional computing and analog ways of doing business and more fintechs shake up the banking sector, it’s impossible to picture any bank beating competitors without a digital overhaul.
So, 20th-century solutions such as on-premises mainframes, data centers, data warehouses, relational databases, and software, long the backbones of finance, now hold banks back. For the agility you need to win and keep the hearts and minds of your customers, it’s time to consider giving your older technology a rest and creating a modern architecture and applications by rehosting your mainframe.
Various analysts and industry experts estimate that more than half of core business processes are still running on a mainframe system. In many ways, the mainframe is one of the most reliable marvels of the 20th century that still exists. However, the combination of maintaining and relying on old and usually outdated mainframe applications is a costly endeavor. And the morass of tangled patches and updates that keep them running creates an inflexible environment that affects performance.
Mainframe infrastructure is also too rigid to deliver the agility that banks need to address customer expectations for a streamlined banking experience from mobile app to ATM to branch. Cloud-first applications and modern development practices have replaced the mainframe as the source of innovation in a disruptive environment. Cost considerations and changes in the workforce are also having an impact on mainframe’s viability as a long-term technology solution.
Rehosting offers banks a solution for addressing the challenges of maintaining a decades-old mainframe and its applications. Rehosting moves your legacy business systems from a mainframe environment to a more modern, open platform. The result is the cost savings and the greater flexibility needed to drive and deliver instantaneous, highly personalized experiences similar to those on mobile devices to consumers, investors, mortgage brokers, capital markets, major accounts, and more. A number of banks have been using rehosting to solve their mainframe challenges, including a major U.S. Bank.
The core business system of a global bank was housed in an IBM mainframe with a footprint of 19,000 batch processes. The company wanted to move its Portfolio Management System (PMS) suite of applications from ADS/O and COBOL/IDMS running on a mainframe, to COBOL running with Oracle on Unix without changing the user interface in the process.
As with most homegrown systems, it was built out of necessity and to serve the business as it existed at the time. Over the decades, this small system increases in size and complexity to become the central nervous system of both the company’s direct and indirect business units, comprising four highly customized implementations. With over five million account schedules, 382 interfaces, 1,700 concurrent users, and 3.5 million transactions per day running against 71 million lines of code, the PMS system had come a long way from its humble roots.
However, using such a legacy system to support the whole business was incredibly risky; if their PMS went down, the business went with it.
To tackle this project, the company selected TmaxSoft to deliver the solution. TmaxSoft assisted with the IDMS to CICS conversion work, and used its OpenFrame solution for rehosting the converted applications on Unix. OpenFrame provided various components to emulate the functionality of the different sections of the mainframe and was the ultimate landing place for the new open systems environment hosting the PMS suite of applications.
After rehosting, the bank has a lower-cost, more manageable environment. They report enhancements in CPU capability (10,000 MIPS), improvements in transactions per second (4x), a response time of 200 milliseconds, and optimized batch processing. Cost reductions were estimated to be $17.5 million in the first five years after the project.
As the bank’s story shows, rehosting can offer your bank a cost-effective method of addressing the challenges of maintaining a decades-old mainframe and its applications. In recent years, the banking sector has been undergoing significant transformation, and modernization is a way to to get in on the ground floor. So if you choose to rehost your mainframe, your firm will be offered many benefits, which can include:
Other variations of mainframe rehosting are MIPS reduction and re-platforming. MIPS is an acronym for “millions of instructions per second,” and it’s a measurement of computing resource consumption. MIPS reduction offloads high-consumption workloads in mainframe environments onto less costly open systems or the cloud. Re-platforming uses automated tools to convert legacy applications and mirrors their data structures onto an open system or cloud platform. It compiles the programs, translates the sequential files, and installs and configures a new environment.
Mainframe rehosting in the cloud and infrastructure modernization offered by TmaxSoft OpenFrame and our other solutions—Tibero, JEUS/WebtoB, and Tmax—provide the performance, speed and availability needed to complement the demands of banking in the 21st century. The applications that are migrated to the cloud run in a modern architecture, so your bank or finance firm is more agile and competitive with a platform for future growth. Operating systems in rehosted mainframes are open, and they integrate with the new technology required to achieve a competitive edge.
Not only are there cost savings, but you gain greater flexibility, which can drive and deliver instantaneous, highly personalized experiences similar to those on mobile devices to customers, brokers, and branches. There is no negative impact on the enterprise or on the measures already in place to address regulatory compliance and data security, and it requires minimal training.
Paul Bengtson is the Vice President of Sales for TmaxSoft. He has spent more than 20 years selling technology in segments as diverse as big data, analytics, ERP, cloud and SaaS. Paul joined TmaxSoft in 2016 from EFI where he was Sales Director for its ERP solutions. He also has held senior leadership positions with Radius Solutions, where he was VP of North American Sales, and with Misomex, Artwork Systems (now Esko) and Ace Hardware. Paul has a BS in MIS from the University of Iowa and an MBA in MIS from Benedictine University.