BIAN: a path to banking interoperability

Today, for many consumers and businesses, banking is a matter of tapping a screen or speaking into a voice assistant. However, the digital transformation is not complete. Technological opportunities can help banking institutions become even more customer-focused and efficient. These new opportunities are leading to the rise of coreless banking, a new approach to banking that is cloud-based and asset-light.

What is coreless banking?

Coreless banking removes some of the demands and overheads of traditional banking systems, making banks more agile and responsive to customer needs. The new approach uses microservices to deliver banking services and helps banks reduce costs, improve agility and embrace a more open model of banking.

Coreless banking, however, can also introduce complexity. This is where the Banking Industry Architecture Network (BIAN) framework can help. BIAN provides a common framework for banking interoperability, which can help to reduce complexity and make coreless banking more feasible.

Established banks that adopt a coreless approach can move quickly to meet market needs, just like their younger competitors.

Coreless banking can be understood as being composed of four specific layers:

● Business capabilities and processes

● Banking-specific technology capabilities (these include tools for things like risk profiling, customer prequalification, and authentication)

● Cross-industry technology capabilities (thinks like accounting systems, communication and knowledge management tools and platforms)

● Infrastructure

All four are important, but BIAN is specifically important in the context of the first two elements. We’ll look at those in more detail shortly, but let’s first look at exactly what BIAN is.

What is BIAN?

BIAN is a not-for-profit organization that helps the banking industry adopt a shared service-oriented architecture. BIAN can help banks:

● Communicate more effectively with each other and with their customers through its shared service-oriented architecture

● Reduce the cost of maintaining legacy systems

● Be more agile and responsive to changes in the market

● Focus on the needs of their customers and create new services and products that meet those needs

Here are some of the ways in which BIAN helps banks with the move to coreless banking:

● BIAN's framework helps banks to understand the different service domains that need to be considered when moving to coreless banking. This can help banks to identify the right services to outsource and the right services to keep in-house

● BIAN provides reference data models and API specifications that can help banks to select the right technology for their needs. This can help banks to ensure that their technology solutions are interoperable with other systems and that they are effective in meeting the needs of their customers

● BIAN provides guidance on how to organize a bank to support coreless banking. This guidance can help banks to create the right organizational structures and processes to manage and leverage a service-oriented architecture

While BIAN is a valuable resource for banks that want to move to coreless banking, it is not a silver bullet. Banks still need to do the necessary work to implement BIAN effectively. This includes understanding their existing architecture, creating custom model extensions, and remaining in sync with BIAN releases.

Some of the challenges that banks may face when implementing BIAN include:

● Mapping data elements to the BIAN BOM: The BIAN BOM is a general reference model, so it may not cover all of the data elements that a bank needs. Banks may need to create custom model extensions to cover these gaps

● Remaining in sync with BIAN releases: BIAN releases new versions of its framework on a regular basis. Banks need to remain in sync with these releases to ensure that they are using the latest version of the framework

● Understanding the existing architecture: Banks need to have a good understanding of their existing architecture before they can implement BIAN. This includes understanding the different systems and processes that are in place, as well as the interactions between these systems and processes

Author: Muralikrishnan Puthanveedu, Head of BFSI for Thoughtworks in India and Pranab Pandey, Principal Consultant at Thoughtwork (Views are personal)