Mainframe Modernization in the Financial Services Industry

The Changing Role of the Mainframe

The continued prevalence and reliance of mainframe in financial services organizations comes down to critical characteristics of that platform that include resilience, speed, security, and scale.  But while the mainframe continues to be a critical resource in the institution's infrastructure, it doesn't mean that the platform is standing still in its evolution or role it plays in the institution.  The technological advances that have happened over the last decade, including AI and advanced digital channels, are driving a demand to ensure that business applications are delivered on fit-for-purpose platforms that allow the institution to become or remain agile and respond to market conditions as quickly as possible.

Cloud, for example, has become a viable alternative for many workloads as it, too, brings a number of beneficial characteristics to the institution’s infrastructure, including faster scaling, usage-based pricing, a constantly growing software ecosystem, and shifting spend from capital to operational budgets.  Surprisingly, although most organizations list security as a concern when moving to cloud,  according to IDC surveys financial services organizations report improved IT security for workloads that have migrated to cloud.  By no means does this mean that every application or workload can be, or even should be, migrated from the mainframe to a cloud.  But the combination of business drivers like AI and the benefits of modern development paradigms and deployment models leads inexorably to a re-evaluation of the role of the mainframe, and to what extent the mainframe should evolve to continue to support the needs of the institution.

The reasons an institution would consider modernization include, but are not limited to:

• A new technology like AI can drive the institution to update the mainframe or deploy applications on cloud to support the new technology.
• New workloads are vetted based on the sensitivity of the data they produce or consumer.  This may drive some modernization of applications to support the new functionality, which may, in turn, lead to either moving the application to cloud, or updating the mainframe to deploy the workload there.
• The cost of mainframe operations is often cited, justifiably, as a reason to modernize workloads and move them to non-mainframe environments.
• Talent for mainframe development and support is also a hurdle for every financial institution that operates the platform.  In particular, the need for COBOL development to maintain and, in some cases, create new applications is stretching the institution's ability to find and retain staff that can work on COBOL/mainframe environment.
• Ultimately, moving to cloud-native environments can enable faster development cycles through modern DevOps practices, enabling the lines of business to compete more effectively in fast-moving and sometimes disruptive markets

‍

Read the full article about the five main steps that organizations take to modernize on Amdocs.com