Modernize Banks with Events and Messaging

Analyst Viewpoint

The modernization of cloud computing has introduced new challenges for banks seeking to meet the digital business requirements for innovation and transformation. Doing this is not simple, as many disparate cloud-related technologies and the methods used to interconnect them were designed neither to interoperate easily nor to function in real time and in a secured manner. As banks operate in the hybrid cloud with integration to legacy systems in the enterprise, they must maintain the continuity of business processes, among them domestic and global transactions as systems of record that connect customers and financials as well as devices at banking retail locations and ATM machines. These advances in computing and interconnectivity will yield new opportunities for monetization but will also involve challenges in ensuring continuity of banking operations.

To address these demands, a modern generation of event and messaging technology has standardized to support digital transformation and help connect machines and applications securely. This modern generation of events and messaging is agile in interoperation across cloud protocols, and can guarantee and secure messages across platforms and the internet. This has allowed banks to interconnect internally and across a variety of cloud computing environments—public ones such as Amazon’s AWS, the Google Cloud Platform and Microsoft Azure as well as private ones such as those provided by technology from IBM, Oracle, Salesforce, SAP and other platform as a service (PaaS) providers. Today’s event and messaging technologies can connect from the enterprise directly to cloud computing environments or can connect to another message broker or platform to minimize the computing cycles used in processing messages from point to point, much as network appliances have done in the past. Advancements in virtualization enable these enterprise event and messaging brokers to operate across a variety of computing environments without additional hardware.

Previous generations of messaging technology have been difficult to maintain across hardware server environments and required farms of servers to meet demand and provide the low latency needed in message queue architectures. In addition, specialized enterprise architects are needed to manage their operation and interfaces with other systems.

Now, by embracing event and messaging tools that can interoperate across a wide variety of legacy and newer messaging protocols, architects and developers can focus on how to advance their new systems and applications and insulate themselves from the peculiarities of the underlying messaging. Banks can now use a unified messaging approach that can interoperate dynamically and securely in real time with very low latency, minimizing bottlenecking. And they are able to interoperate with other existing messaging systems such as Amazon SQS or RabbitMQ, allowing for more flexibility in the interconnectivity of messaging across heterogeneous environments. But it is not always an easy process to adapt and deploy this next generation of enterprise messaging in a data center and computing environment. Digital innovations require increasingly faster approaches to meet deployment schedules. The subscription model of computing has continued to advance over the past decade such that banks no longer need to specialize in technology; instead, they depend on a technology partner, subscribing to and paying for what they use. The computing methods consumed “as a service,” from software as a service (SaaS) to the layers of infrastructure as a service (IaaS) and platform as a service (PaaS) have become not only standard but in many cases the only way that banks can access the latest technologies.

As the platform- and infrastructure-as-a-service model continues to advance, banks should strive to maximize flexibility, utilizing open standards and protocols to not only standardize messaging but embrace and utilize it with cloud computing. Banks should seek technology that provides easy integration and deployment of messaging and support for developers. Like other subscription approaches to software and technology in the cloud, unifying messaging in what now is called messaging as a service (MaaS) makes sense. With this approach, banks can have not just interconnectivity but also the ability to ensure that the messaging is being properly managed by those who have the appropriate expertise. The reality is that there are not enough enterprise architects with messaging experience in the world for every bank to have those skills at its disposal. Coping with this situation requires that banks make their computing environment simpler and smarter by working with technology vendors that specialize in this modern approach.

While many IaaS and PaaS suppliers try to ensure the interconnectivity of their offerings by supporting messaging standards, they are challenged by the continuously changing technological landscape. But suppliers, particularly those that do not specialize in enterprise messaging, simply will not be able to keep pace with changes in computing environments they do not control. What’s more, if banks have issues, they are left to talk to support teams that are not going to be trained in or responsive to a bank’s specific messaging needs. And the stakes can escalate quickly; the risk in working with technology providers that do not specialize in enterprise messaging increases as security and guaranteed messaging become increasingly essential for business continuity.

As the banking industry continues to invest in digital innovations that better ensure their future, their technology infrastructure will ever more urgently require a faster and smarter—as well as a more open and flexible—approach to enterprise messaging and event-driven architectures. A subscription-based messaging service that provides management of the hardware and secured interoperability in the software can eliminate the challenges found in legacy approaches. Reliable enterprise messaging is essential to the continuity of services that every bank provides. For this reason, it is critical that the banking industry take a closer look at manageability of the interconnectivity across cloud computing and enterprise hybrid environments and examine messaging as a service.