It All Begins with Embarking on the SOA Journey-Service Oriented Architecture

Rajendra Mhalsekar, President, Head, Corporate Banking Technology, YES Bank

In a business process, the user tasks could be separated from each process and implemented in a way that enables other processes to call them as a service. This allows the shared functions to be repurposed across all processes. The common service bus is really a virtual environment whereby services are made available to all potential consumers on a fabric. Enterprise Service Bus.

ESB helps to achieve the following organization goals:
•Connects everything to everything
•Transforms between different formats
•Identifies and distributes Business events
•Converts between different transport protocols.
•Matches and routes communication between services

A current challenge faced by banks is the legacy of backend systems and the peculiarities that they carry. This is particularly not helpful in today’s fast paced digital era, organizations prefer solutions agile solutions. Ubiquitous business processes such as funds transfer between corporate entities and remittances can sometimes extend across multiple backend banking systems each having its own level of complexity. This would end up increasing point to point integration touch points and would make the integration more cumbersome. Current payment mechanisms for corporate clients consist of file uploads where the end to end process includes a higher TAT and as the process is vulnerable to manual errors while validating/authorizing transactions. Gartner says Banks should be Banking on APIs and Apps, not applications.

API Banking is the latest Innovation- API stands for Application Programming Interface, which in simple words, provide access to an organization’s digital assets and services. Companies use an enterprise resource planning (ERP) software such as Tally, SAP etc, which keeps an account of all transactions of the company. 

Now through API Banking facility, the bank’s server can be directly connected to the ERP and an instant payment could be made. 

API Banking is technological initiative that enables a software program to interact with other software. APIs have multiple features that facilitate real time information sharing between two different communicating entities. This innovation is important as it establishes links to leverage levers of innovation: SOA, Knowledge Banking and Nimble technology.

Becoming a digital business is a massive transformation. We have seen technology begin to take its place as a primary driver of profitability and market differentiation in every industry. 

Many industry leaders have embraced this transformation and began to re imagine their businesses for the digital era. Today, we see pioneering enterprises beginning to do just that—but they are doing far more than just flexing their digital muscles. They are fundamentally changing the way they look at themselves; leading enterprises are quickly mastering the shift from “me” to “we.” They are stretching their boundaries by tapping into a broad array of other digital businesses, digital customers, and even digital devices at the edge of their networks. Leaders eager to drive change are using this broader digital ecosystem to place bets on a grand scale. Many such forward-thinking companies are looking to shape entire markets and change the way we work and live. 

Given this market dynamics the major challenges faced by the deployment of API Banking were mainly around a new technology with limited expertise; products that had not been implemented previously in the Banking Industry in India; managing security of transactions and primitive technology set up of our clients.

Tangible Benefits
Seamless customer experience with rapid on-boarding capabilities with industry first initiative with YES Bank gaining a first mover advantage is the primitive benefit. Also tapping in to the growing market of inward remittances from Indians abroad at the same time Increased monetization of API usage on Transaction Banking is advantageous. Providing real time banking capabilities through wallets on social media/mobile, promotes extensive use of IMPS as a transfer methodology thus increasing the overall transaction cost but improving overall customer experience. 

Intangible Benefits
Provides for a secure abstraction layer based on common standards in order to provide reliable access to banking systems and business processes and also extends the paradigm of ‘instant’ to financial transactions between companies and closely aligns with the Digital India ideology. Other benefits include : as the TAT for transactions is drastically reduced, funds are credited to end customer accounts at a much faster rate which exemplifies Responsible Banking; provides automated and real time facilities for KYC and AML thus reducing need for manual intervention and ensuring robust business processes; enforces YES Bank’s position as a Bank with focus on customer-centric technology.