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Application Architecture Strategies in Retail Banking (Strategic Focus)

  • Publication Date:November 2008
  • Publisher:Datamonitor
  • Product Type: Report
  • Pages:25

Application Architecture Strategies in Retail Banking (Strategic Focus)


Retail banks have developed complex IT infrastructures which aren't always suitable to meet new demands in the changing competitive environment. Datamonitor believes that banks require new application architectures that will meet operational requirements for at least 10 years, allowing them to amortize their investments and to first embrace and then leverage upcoming technologies and trends.


  • This report examines the reasons behind why retail banks throughout the world are seeking to enhance existing application architectures.
  • This report examines the application architecture strategies available to retail banks, but avoids assuming a 'onesizefitsall' approach will work.


Banks are revisiting application architecture strategies in light of changing operational requirements. Many of the world's retail banks have unintentionally created complex application 'landscapes', often with a minimal degree of integration and an overreliance on 'silos' for specific functions. Legacy integration infrastructure struggles to deliver efficiencies in modern retail banking. The transition to a customercentric, multichannel approach represents a development where institutions must move to a more flexible and streamlined integration architecture if they are to remain competitive. Developing a seamless multichannel experience for customers requires a fully integrated infrastructure. SOA provides the most flexible and costeffective solution to achieve this aim. The combination of SOAenabling future internal IT infrastructure and the selective use of SaaS is an optimum application architecture strategy for retail banks.

Reasons to Purchase

  • Gain insight into the challenges faced by retail banks seeking to develop their application architectures.
  • Understand the technological evolution of application architecture and the level of SOA penetration in the world's retail banks.
  • Gauge how market conditions are influencing application architecture strategy, including the use of hybrid SOA/SaaS models.
  • Overview
  • Catalyst
  • Summary
  • Key Messages
    • Banks Are Revisiting Application Architecture Strategies In Light Of Changing Requirements
    • Legacy Integration Infrastructure Struggles To Deliver Efficiencies In Modern Retail Banking
    • Soa Is A Key Approach For Retail Banks To Adopt
    • A Soa/Saas Hybrid Delivers A Modern, Flexible Application Architecture Strategy
  • Market Opportunity
    • The Retail Banking Environment Is At Its Most Challenging In Living Memory
    • The Effects Of Market Conditions On Technology Spending
    • Understanding Application Architecture And Enterprise Architecture
    • Defining Enterprise Architecture
    • The Challenges Faced By Retail Banks Looking To Develop Their Application Architectures
    • Customer Experience Management And Channel Infrastructure
    • Internet Sales And Service
    • Branch Sales And Service
    • Contact Center Sales And Service
    • Marketing
    • Customer Decisioning
    • Customer Proposition Development And Product Infrastructure
    • Credit Risk And Impairment Management
    • Industrialization Is An Underlying Driver For Application Architecture Strategy In Retail Banks
  • Technology Evolution
    • Understanding The Traditional Approach To Application Architecture In Retail Banking
    • Legacy Integration Infrastructure Struggles To Deliver Efficiencies In Modern Retail Banking
    • Traditional Integration Methods Result In Complexity, Lack Of Scalability Or Expensive Integration
    • PointToPoint Integration Creates Costly Complexity With Multiple Applications
    • Hub And Spoke Integration Is More Manageable But Suffers From Bottlenecks And A Lack Of Scalability
    • Message Bus Architecture Allows A Scalable Solution But Proprietary Requirements Make It Expensive
    • The Role Of The Mainframe
    • The Implementation Of MultiTier Architecture Has Created Problems For Retail Banks
    • Remedial Action Must Be Taken By Retail Banks In Order To Improve The Application Architecture
    • Soa Is A Key Approach For Retail Banks To Adopt
    • The Role Of Soa
    • Soa Using An Esb Reduces Complexity And Provides A More Flexible And CostEfficient Approach
    • Applications Are Connected To The Esb Through Smart Adapters
    • The Use Of Web Services Standards
    • The Level Of Soa Penetration In Retail Banking
    • The Role Of Software As A Service
  • Customer Impact
    • Market Conditions Are Dictating Change In Application Architecture Strategy
    • The Impact Of Soa And Saas On Application Architecture Strategy
    • Illustrative Examples: SoaEnabling It Infrastructure And The Selective Use Of Saas
    • SoaEnabling It Infrastructure
    • The Selective Use Of Saas
  • Go To Market
    • Understanding The Appetite To Invest In Soa
    • Vendors' GoToMarket Strategies Need To Be Refined For A More Widespread Uptake Of Soa
    • Vendors Need To Develop More NonIt Material For Demonstrating The Benefits Of Soa
    • LowerPitched Marketing Material Will Help Business Management Understand Soa
    • Parallel Systems That Help Demonstrate Roi Will Be Useful For It Management
    • Soa Approaches Customized To The Vertical Market Will Help Retail Banks To Differentiate Between Vendors
    • Recommendations
    • Have A Soa Roi Model That Is Both Accurate And Easy To Understand
    • Banks Will Be Interested In Technologies And Business Models That Help Stretch Operating Budgets
    • Ensure Any Discussion On Application Architecture Strategy Has A Distinct Business Flavor To It
  • Appendix
    • Definitions
    • Acronyms
    • Banking Tiers
    • Methodology
    • Further Reading
    • Ask The Analyst
    • Datamonitor Consulting
    • Disclaimer
  • List Of Tables
    • Table 1: Return On Investment (Roi) Calculation For Measuring Soa Benefits
  • List Of Figures
    • Figure 1: Enterprise Architecture Hierarchy
    • Figure 2: Industrialization As A Key Driver In Application Architecture Strategy
    • Figure 3: PointToPoint Architecture
    • Figure 4: Messaging Bus Architecture Allows Scalability But Can Suffer From High Costs
    • Figure 5: Esb Uses Open Standards To Integrate Applications On Different Platforms
    • Figure 6: HighLevel Application Architecture Strategy Of A Tier 1 Retail Bank
    • Figure 7: Area Of Investment For Single Biggest It Project In Current Budget Year
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