Photo of Hans Tesselaar, BIANThe Banking Industry Architecture Network (BIAN), the
not-for-profit association of leading banks and vendors, is ramping
up its efforts to promote a reduction in integration costs and
promote the advantages of service oriented architecture.

Working closely with other
standards initiatives, such as ISO 20022, IFX Forum and Open Group
(TOGAF), the OMG Financial Domain Task Force and the TM Forum
Enterprise Cloud Leadership Council (ECLC), BIAN’s mission is to
define and set the de facto IT standards for banking
interoperability services.

In practice, that means banks
sharing their requirements for core banking solutions.

For software vendors and service
providers, the drive is to implement these solutions based on
formally defined semantics with the pitch for BIAN membership being
a “win-win” solution for all.

Executive director of BIAN, Hans
Tesselaar, told RBI that BIAN is entering a new era.

“As a direct result of the biggest
financial crisis for 80 years, there is an imperative need for the
IT community to change,” Tesselaar said.

“The days of unlimited IT budgets
are gone and business colleagues are demanding more value for their
IT spend. This month, Gartner revised downward its outlook for 2012
global IT spending to 3.7% from its previous forecast of 4.6%

He said the future is no longer in
banks investing in their own system development; instead, banks
need to integrate ‘off the shelf products’ into their existing
legacy environment.

“Our experience is that integration
costs are often treble the purchase costs of the original
software,” Tesselaar added.

He argued that such costs can make
or break the business case in the deployment of new functionality
or purchased packages.

In particular, every time a common
bank function is developed, or redeveloped in isolation, a wealth
of industry knowledge and experience is lost.

Not only does this result in wasted
time, but such a function is unlikely to be the most efficient

“Furthermore, every time a software
vendor turns these redeveloped common functions into proprietary
code and claims uniqueness, the banking industry is worse off,”
Tesselaar said.

He added that, by adopting
industry-wide IT standards, the banking industry can begin to move
towards interoperability, whereby different IT systems within a
bank can work together as seamlessly as possible, without
additional time or cost requirements for integration.

Tesselaar argued that the work
accomplished within BIAN has implications for banking in the

He said interoperability within the
application landscape is a prerequisite for deploying applications
in the cloud.

For banks to use the cloud
effectively, the banking sector needs “an open and controllable
environment (with audit trail) and reliable interfaces or services
between the different components”, Tesselaar said.

“This is what BIAN Standards
provide. Whether a private, virtual or public cloud, the same
issues apply,” he added.

According to a report from Gartner,
The Benefits and Drawbacks of BIAN Membership, one of the
biggest benefits of active participation in BIAN offers “a boost in
a bank’s reputation as being a forward-looking institution by
taking a leadership position on a new technology approach to bank

Membership has grown to over 30
members from the banking and IT industry.

Banking members include: ABN AMRO, Commonwealth Bank of
Australia, Credit Suisse, Deutsche Bank, Deutsche Postbank, ING,
Rabobank, Standard Bank of South Africa, Scotiabank and UniCredit.
Prominent vendors signed up include: ACI, Callataÿ & Wouters,
IBM, Infosys, Microsoft, SAP, SunGard, SWIFT and Temenos.