A European bank grows profitably and lowers costs

Largely through acquisitions, this financial institution, which is based in Rome, has banking operations from Italy to Austria, Russia and Southern Germany. The bank also has operations in Central and Eastern Europe and investment banking divisions in London; Milan; Munich; Vienna; Moscow; Budapest, Hungary; and Warsaw, Poland. Overall, it serves approximately 40 million customers and has operations in 22 countries.

The company established an integrated solutions unit to provide operational services and support for the institution’s network.. Its activities include those outlined below.

Facing the challenge

Like the vast majority of European banks, this financial institution faces an extremely challenging market and competitive environment, with profitability under pressure and growth constrained by economic weakness. As such, the bank has numerous important strategic priorities. But few are more vital than the need to reduce costs. This is especially true in the realm of information and communications technology (ICT), where the bank continually focuses on delivering higher levels of performance and better quality service to its customers within tightening budgetary constraints. In addition, the institution has faced rising demands from its customers and partners for new levels of functionality, security and integration flexibility. The need to satisfy these requirements had an important bearing on the bank’s recent decisions regarding upgrading its core technology infrastructure.

The heart of that infrastructure is a pair of IBM System z® servers running a Parallel Sysplex® environment. Two of the most important software components of the bank’s infrastructure are IBM DB2 and IBM Information Management System (IMS™) software, which run its core banking systems. As part of its ongoing infrastructure planning efforts, the bank saw important reasons for upgrading to the latest versions of these two core servers. On the database side, the bank was attracted by the opportunity to further reduce its CPU consumption by taking advantage of the new capabilities of the IBM DB2 10 for z/OS data server, such as the optimization of processor times and memory access, the greater use of specialized processing engines and the more efficient use of the coupling facility, which governs resource sharing within the DB2 data server. All told, the institution expected an average reduction in CPU consumption of up to 15 percent for its core applications.

New security imperatives

Another key motivator for upgrading the DB2 data server was security. The bank is a complex enterprise, with semi-autonomous operations spread across several countries. As such, it routinely shares confidential information with member banks across national borders. To further strengthen data security, the bank sought to improve its ability to limit access to confidential transaction and financial information stored within the DB2 data server. It saw that opportunity in an advanced new function within the DB2 10 for z/OS data server known as security administration authority (SECADM), which delineates who can manage database security and who can maintain and access the data, thus reducing the risk of a security breach or data theft.

In upgrading to IMS V12 software, the institution saw the opportunity not only to reduce its CPU consumption but also to simplify managing its resources within the IMS repository. In turn, this promised to streamline the cost and time spent on systems administration tasks. Moreover, in the realm of application development, The bank also sought to capitalize on the new IMS software version’s improved capability to connect distributed applications with IMS systems running on the mainframe. This improvement is attributed largely to the simplification of application programming interfaces within IMS Connect (an integrated function of IMS) which help enable IMS Connect client applications to interact with the IMS solution.

The path to CPU efficiency

While the migration continues to unfold across its different banking units, the institution has already begun experiencing concrete benefits. Where the first (conversion mode) phase of the DB2 data server upgrade is complete, millions of instructions per second (MIPS) consumption dropped significantly for both online and batch workloads. That efficiency improvement, combined with expected reductions in systems management requirements going forward, is expected to reduce the bank’s overall IT costs over the coming years. For that reason, The bank believes that its decision to upgrade core elements of its software infrastructure lays the groundwork for more profitable future growth.

Making connections

As the bank’s application development efforts shift toward web services, the still-in-progress IMS software upgrade also helps it prepare for the future’s competitive demands. For instance, by implementing IBM IMS Enterprise Suite SOAP Gateway software (a component of IMS), the bank has been able to deliver numerous IMS applications as web services. In the future, these improved web services capabilities will also help it establish critical business linkages with other banks and financial institutions, and do so with fewer resources and at lower cost. Finally, should the bank choose to grow through future acquisitions, its more flexible IT infrastructure will make the integration process faster, easier and ultimately more profitable.

For more information

To learn more about the IBM System z software, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/software/systemz
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