Core Banking Transformation: Starting from Z

Share this post:

A fresh look at the strategic nature of core banking platforms

I love doing research! And so, in preparation of producing a banking perspective on IBM’s groundbreaking launch of the z14 mainframe this summer, I dove into all the analysis, surveys and opinions I could find. Patterns in my research led me to identify three main industry drivers for this shift: cyber-attacks on client accounts and personal data that put trust at risk; a new generation of connected and empowered consumer who demands superior service; and the way in which digital transformation has changed the economics of banking.

Dealing with these drivers is causing traditional branch and online banking arrangements to give way to partnerships in an ecosystem economy, where banks act more like orchestrators and relationship managers, facilitating access to the most innovative and useful services regardless of how they are sourced. And this means that dedicated, on-premises infrastructure must be combined with public and private cloud in a seamlessly integrated hybrid-cloud that maintains the core banking promise while fully supporting this new banking business model.

Core infrastructure delivers the safety, security, and robustness that have helped build banks’ reputations. However, core infrastructure is rarely considered strategic in transformative planning. Building an agile, next-generation banking architecture requires a cultural shift within IT that takes a fresh look at the strategic nature of core systems platforms – platforms uniquely positioned to begin this transformative journey without risking current operations.

And for many (if not most) of you reading this, your core platforms are IBM Z computers.

IBM Z enjoys a well-earned reputation as the proven leader for core, transactional banking systems. But with z14, the platform is no longer just about processing transactions. Constant improvements have transformed Z into a modern, versatile 21st century tool for sustaining banking innovation and established it as a linchpin for the success of cloud-based ecosystems. In fact, in 2017, 47 percent of banking executives said that a mainframe-enabled hybrid cloud would support growth through improved operating margins.[i]

Banking is undergoing a major transformation. But transformation takes time, and steps can be taken today with IBM Z that incrementally position a bank for thriving in this new world. I collaborated with the IBM Institute for Business Value and my IBM colleagues Likhit Wagle (General Manager, Financial Services Sector, IBM Asia Pacific) and Chae An (Vice President and Chief Technical Officer, IBM Financial Services Sector) to detail these steps. I encourage you to read our findings.

Meet with me or other IBM experts at Sibos 2017 and read these related blogs:


[i] Krishna, Arvind, Sanjay Rishi, Nicholas Drury, Lynn Kesterson-Townes and Anthony Marshall. “Tailoring hybrid cloud for banking.” IBM Institute for Business Value. April 2017.

z Systems Industry GTM Program Director IBM Systems

More Banking stories

IBM in “Leaders” Quadrant of 2019 Gartner Magic Quadrant for IT Risk Management, fourth report in a row

Our goal has always been to provide our customers with the tools and insights that help them meet their governance, risk and compliance (GRC) needs, and we do so, by leveraging the innovation of IBM within a single ecosystem. It’s gratifying to see IBM once again positioned in the Leaders Quadrant of the 2019 Gartner […]

Continue reading

What customer complaints can tell you about your experience (and your compliance)

Until recently, the words “customer experience” and “compliance” didn’t really come up in the same conversation – let alone exist in the same universe. The former was the domain of customer care professionals, contact center managers, marketing leaders and digital strategy teams with the goal of helping streamline and simplify products and services, as well […]

Continue reading

Why real cross-channel payment data integration matters

According to the 2019 AFP Payments Fraud & Control Survey, Automatic Clearing House (ACH) payment fraud increased significantly in 2018, reaching a new record with 82% of organizations reported incidents. Specifically, the percentage of companies that encountered ACH credit fraud jumped to 20% (from 13%), and those who experienced ACH debit fraud rose to 33% […]

Continue reading