SMU Teaching Bank

Developed and Managed by

The School of Information Systems

Singapore Management University

The implementation of a banking enterprise architecture, as an evolving platform for learning

Presented by: Alan Megargel, Senior Lecturer of Information Systems

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SMU Teaching Bank

• SMU has embarked on a multiyear programme entitled “SMU Bank for Financial Services Education”, referred to as “SMU Teaching Bank“ (or “SMU tBank”).

• Starting from a clean sheet, we are building a “teaching bank” from the ground up, using today’s architecture best practices.

“The mission of SMU tBank is to become a world class ‘teaching bank’, generating an on-going supply of undergrad and postgrad student projects whereby classroom learning outcomes can be put into practice, leveraging industry leading banking software and enterprise platforms.”

SMU tBank Guiding Principles

1. SMU tBank shall exist for academic purposes only, to support banking related coursework, labs, and student projects.

2. SMU tBank shall align to, and inform, SMU’s Unified Banking Process Framework.

3. SMU tBank shall be assembled using a mixture of vendor products, in order to demonstrate real world change scenarios:– A core banking system replacement

– A bank merger, whereby multiple vendor products need to coexist

4. SMU tBank shall be a platform for collaboration with banks and product vendors, for incubating new innovations.

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4

(Flexcube)

Internet Banking

Mobile Banking

Teller

Core Banking System A

Core Banking

System B

Algorithmic Trading System

Content Management

System

Existing platforms

available at SMU

can be integrated

into a teaching

bank

Banking apps to

be developed

through student

projects Payment Gateway

SMU tBank Conceptual Model

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Investing

Savings/

Surplus

Funds

Receiving/

Paying

for Services

Managing

Portfolio

Risk

Deposits/

Investments/

Insurance

Loans/Advances

Fund Raising

Capital/Currency

Commodities

Market

Trade/Project

Finance

PROCESS DATA TECHNOLOGY

Financing

Personal/

Business

Needs

Support for

Cross Border

Trade/Projects

Accounting &

Financial

Controls,

Reporting,

Audits

Internal Risk

Management,

Controls,

Reporting,

Compliance

Customer,

Sales Force,

Distribution Channels,

Data & Analytics

Systems Design,

Controls,

Production

Remittance/ Cash

Management/

Cards

Customer Needs

BankProducts

and Services

Bank Management

Needs

Financial

Management

Risk

Management

Channel

Management

Operations & Technology

Management

Securities

Safekeeping/

Trade

Settlement

Support

Custodian

Services

SMU Unified Banking Process Framework (UBPF)

The Unified Banking Process Framework is used to visualise how a bank meets customers

needs and internal management needs through processes, data and technology

Investment Banking & Capital Markets

Corporate &Institutional Banking

Private Banking & Wealth Management

Retail Banking

Customer Types

Transaction FulfillmentEnablers

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REGULATORY BODIES

BANK1. Banking Business Segment View: Customers, Products and Services for

Investment, Corporate, Private, Retail Banking

3. Bank Management Functions& Processes View

Middle Office services supporting the life cycle –

� Compliance� Risk Management� Product Control � Accounting

2. Product & Process Lifecycle

View

Knowledge of end-to-end process life cycle

based on specific banking products.

Pro

cess

Customers / Market Participants (internal, external)

4. Data Lifecycle View

Data used to implement business products,

processes, rules and analytics

6. Channel Delivery & Channel Infrastructure View

7. Enterprise Architecture & Integration View

8. Organization and Sourcing View

9. Process Performance View

10. Total Cost of Process Execution View

11. Change Scenario & Impact Tracing View

5. Software Systems View

UBPF Views

The 11 views of the UBPF are used to understand linkages and flows across

banking processes, data, technology and operations

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Investing

Savings/

Surplus

Funds

Receiving/

Paying

for Services

Managing

Portfolio

Risk

Deposits/

Investments/

Insurance

Loans/Advances

Fund Raising

Capital/Currency

Commodities

Market

Trade/Project

Finance

PROCESS DATA TECHNOLOGY

Financing

Personal/

Business

Needs

Support for

Cross Border

Trade/Projects

Accounting &

Financial

Controls,

Reporting,

Audits

Internal Risk

Management,

Controls,

Reporting,

Compliance

Customer,

Sales Force,

Distribution Channels,

Data & Analytics

Systems Design,

Controls,

Production

Remittance/ Cash

Management/

Cards

Customer

Needs

Bank

Products and

Services

Bank Management

Needs

Financial

Management

Risk

Management

Channel

Management

Operations & Technology

Management

Securities

Safekeeping/

Trade

Settlement

Support

Custodian

Services

The UBPF is a framework for understanding linkages between Customer Needs and Bank Management Needs

Investment Banking

& Capital Markets

Corporate &

Institutional Banking

Private Banking & Wealth

Management

Retail

BankingCustomer

Types

Transaction

FulfillmentEnablers

UBPF

MITB (Financial Services) Program in a Nutshell

A.1 Banking Products & Processes

A.2 Retail Banking Technology:

Processes, IT & Architecture

A.3 Corporate & Institutional

Banking Technology: Processes, IT &

Architecture

A.4 Financial Markets Technology:

Processes, IT & Architecture

A.5 Lifecycle Implementation of

Banking Products

A.6 FS Operational Risk: Foundation

& Framework

A.7 FS Operational Risk: Data,

Information, System & Architecture

A.1 is compulsory, minimum 4 others

C.1* Innovation Management

* Half module

* Half module

C.2 Spreadsheet Modeling for

Technology & Operation Decisions

C.3 IT Project & Vendor Management

C.4 Global Sourcing of Technology

& Processes

A. Banking Processes, IT & Architecture C. Information Technology &

Project Management

D. General Management for

Technology & Operations

D.1A* Financial Accounting for

Financial Services

D.1C* Management Accounting for

Technology & Operations Managers

D.2 Strategy & Organisation

D.3 Finance for Operational

Technology & Operations Managers

D.4* HRM for Technology &

Operations Managers

C.2 and D.1A are compulsory unless exempted; choose 2.5 other courses across series C or D.

Exempted course must be replaced by another course from A, B, C or D series.

E.1 Capstone Project

• Project definition, development & critique workshops

• Industry expert seminars & company site visits

E.2 Project Delivery

E. Capstone Project

2 courses

MITB

Banking Solution

Architecture

IS480

SMU tBank Engagement Model

Hands-On Labs

Banking Channel

Prototypes

Banking Use Cases

Post-grade capstone

projects specify the

solution architecture for

banking channels

Undergrad projects deliver banking channel prototypes,

based on the solution architecture specified by post-

grade capstone projects

Unified Banking Process

Framework guides all FS

programs

UBPF banking use cases

inform the post-grade

coursework

Banking channel prototypes developed by undergrad

projects are integrated into the SMU tBank architecture,

and are in turn used to support hands-on labs for both

undergrad and post-grade courses

SMU tBank

SMU tBank Reference Architecture (Phase 1)

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Enterprise Service Bus

MDM BRMS CMS ODS

Payment Services HubChannel Integration

Retail Core Banking

Corporate Core Banking

Trade General Ledger

Treasury

Retail Internet Banking

Corporate Internet Banking

Retail Mobile Banking

Branch Teller

ATM

Ch

an

ne

lsC

ore

Ba

nkin

g

Syste

ms

En

terp

rise

Pla

tfo

rms

SMU tBank Retail Channels

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Retail Internet Banking

Retail Mobile Banking

Branch Teller

ATM

Customer� Account Opening� PIN Creation� Credit EvaluationAccounts� CASA� Term Deposit� Home Loan� Auto Loan� Education LoanTransactions� Deposit/Withdrawal� Bill Payment� Loan Repayment� GIRO / Direct Debit� Transaction History

Account Maintenance� Update Personal Details� Setup Preferences� Setup Alerts� Setup Likes/Interests� Apply for Loan� Apply for GIRO� Account StatementTransactions� Setup Beneficiaries� Fund Transfer� Standing Instruction� Bill Payment� Transaction History� RM SchedulerReal-time Offers� Merchant Discounts� Bank Products

Platforms Supported� iOS� Android

TransactionsSame as Internet Banking plus

the following:

� QuikPayPerson to Person Fund

Transfer using Near-Field-

Communication

Real-time OffersSame as Internet Banking

Transactions� Cash Withdrawal� Fund Transfer� Bill Payment

Account Maintenance� Update Mobile Number

ATM Network Mgmt� Setup New ATM� Monitor ATM Network

Utilization & Uptime� Cash Inventory

Management� Cash Top-up

Forecasting� ATM Location

Optimization

Enterprise Service Bus

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Enterprise Service Bus

• Exposes functionality of banking

systems as reuse-able services

• Data abstraction guided by

BIAN service definitions

• Service mediation maps service

consumers to service versions

• Calls MDM for; Global/Local ID

x-ref, response codes, etc..

• Message logging and monitoring

framework

ESB Provides• Service Mediation• Service Orchestration• Data Transformation• Data Enrichment• Content Based Routing• Location Transparency• Transaction Management

ESB Conceptual Architecture

Consumer-facing Service EndpointsSOAP/HTTP or SOAP/JMS

JMS

JMSJMSJMS

Consumer-facing

business services

exposed using enterprise

standard data semantics

JMS used to transport

messages between

service components

Composite Service

orchestrates multiple

Atomic Services

Atomic Services expose

specific provider system

functionality and data

Provider-facing endpoints conform to provider system’s API, message format

ESB

Adapter

Adapter

Adapters provide

transport protocol

bridging at consumer side

or provider side

BIAN Service Landscape

28/8/201412

• Banking Industry Architecture Network (BIAN)

• SMU Bank service design is guided by BIAN Service Definitions

Business Domain

Service Domain

248 Service Domains defined BIAN

Metamodel

Channel Integration (layer)

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Channel Integration (layer)

• Enables 360° view of and by

customers across multiple

banking channels

• Long running state-full business

process for multi-channel

account origination

• Enables origination to start on

one channel and complete on

another, without having to key

the same data in twice

• Case Management of customer

complaints

Business Process Management

� Business process definition

� Participant specification

� Service interactions

� Workflow patterns

� Simulation

� Emulation and Debugging

Payment Services Hub

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Payment Services Hub

• Orchestrates end-to-end

payment processing, and

interbank clearing & settlements

• Full payment life cycle support• validation, repair, credit check, FX,

liquidity mgmt, advice/statement

• Transforms payment instructions

to/from ISO20022 standard

• Phase 1 support:• Credit Transfer

• Direct Debit

“Gartner defines a PSH as an intelligent central engine, enforcing the capture and

mapping of payment information. It also enforces the rules for all payment

workflows, clearing and settlement routes, and risk mitigation procedures. The PSH

can also be defined as a "middle-aware“ financial IT orchestrator. This means it is

a solution at the center of payment interactions, capable of invoking services and

reacting to events that require other modules. It owns the rules of

payment services integration between payment services and other banking

systems.”

Gartner Industry

Research ID Number: G00172979

Master Data Management

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Master Data Management

• Real-time MDM functionality

exposed via the ESB

• Contains customer master data,

eg; the CIF record

• Contains cross reference for:• Global to Local CIF number

• CIF number to Account number

• Contains reference data for:• Product codes, Account codes,

Location codes, Branch codes, Service codes, Response codes, Complaint codes, RM codes, etc..

Reference Data

Master Data

Conditional Master Data

Transactional Data

Reporting

Business Rules Management System

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Business Rules Management System

• Provides centrally managed

business rules “externalized”

from the processing logic within

channel applications

• Exposed via the ESB as

Decision Services

• Examples:• Credit Decisioning

• Collections/NPL Handling

• Product Pricing (interest, fees)

• Balance Mgmt (sweeps & pools)

• Payment Prioritization & Routing

• Customer next best offer

Content Management System

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Content Management System

• Provides centrally managed

content delivered to customers

across various channels

• Exposed via the ESB as

Content Services

• Examples:• Product marketing content delivered

via Internet Banking, Mobile Banking, email, post

• Account Statements

• Payment Advices

• Provides document workflow for

various back office processes

Operational Data Store

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Operational Data Store

• Holds frequently accessed data

within an in-memory data grid,

for fast access• Provides data access at the speed of

memory (20 micro sec)

• Examples:• Customer profile (CIF record)

• Payment transactions

• Credit Bureau cache

• Core banking system cache

• Supports real-time analytics• Customer next best offer, triggered

by a customer interaction

• In-Memory Data Grid

SMU tBank in the Classroom

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Retail Banking – Students use SMU tBank to learn banking processes such

as; account opening, credit evaluation, loan repayments, fund transfers,

foreign exchange, standing instructions, GIRO, mobile payments, Two-Factor-

Authentication, ATM network management, real-time customer specific

promotion offers. Lab questions assess the students understanding of both

bank processes as well as financial accounting.

Enterprise Integration – Students use SMU tBank to learn integration

technologies such as; Message-Oriented-Middleware, and Service-Oriented-

Architecture. Labs exercises include; building integration components that

allow different applications in the bank to communicate, and drill-down

visualizations of what is actually happen in the integration layer when a fund

transfer is executed, for example.

Architectural Analysis – Students will use a “lite” version of SMU tBank

which is deployed on their laptops, to demonstrate their understanding of 3

main architecture principles; “resiliency” (ability to failover to a standby

system), “concurrency” (handling large number of users), and “performance”

(response time of the application).

SMU tBank Research Areas

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Enterprise Architecture in Banking – Covers EA best practices in a banking

context; alignment to business strategy, EA frameworks and tools, banking

industry information models, enterprise platforms (SOA, BPM, BRMS, MDM,

EDW), EA principles and design patterns, EA blueprints and roadmaps.

Covers the adoption of the Banking Industry Architecture Network (BIAN)

Service Landscape to inform and optimize the decomposition of banking

processes into reusable services. Case studies on EA practices in banking.

Case study on SMU tBank.

In-Memory Data Grid Use Cases in Banking – Covers performance

improvements of data caching, eg; characterization of response times with and

without a data cache in front of the core banking system, and the resulting

impact on customer satisfaction. Also covers the economics of caching data in

front of the core banking system, eg; the cost saving in MIPS incurred on

mainframe systems. Covers how massive-scale in-memory data grid

technology is used to enable real-time cross-sell to banking customers, eg;

next best offers pending in memory, triggered on the next customer interaction.

Covers real-time fraud detection.

SMU tBank Research Areas (cont.)

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Core Banking System Replacement – Covers the scenario where a core

banking system is replaced, eg; Oracle Flexcube is replaced with Infosys

Finacle. The transition from one system to the other can be done with

minimum impact to banking channel applications, by using a flexible service

oriented architecture. Using SMU tBank as a test bed, specific scenarios can

be trialed in conjunction with actual banks in Singapore that want to participate

in the study.

Bank Mergers: Technology Migration or Coexistence – Covers the

scenario whereby one bank acquires another, and the combined bank needs

to make decisions about which technology to keep or discard, and which

technologies can coexist. The coexistence of different technologies across the

two banks can be achieved with minimal impact to banking channels, by using

a flexible enterprise platforms such as; SOA, BPM, BRMS, and MDM. Using

SMU tBank as a test bed, specific scenarios can be trialed in conjunction with

actual banks in Singapore that want to participate in the study.

SMU tBank: Capstone Projects Areas

1. Enterprise Architecture

2. Channel Integration Layer

3. Payment Services Hub

4. Retail Internet Banking

5. Retail Mobile Banking

6. RTGS Simulator

7. General Ledger

8. Credit Limits Management System

9. Service Management System

10. Master Data Management (MDM)

11. Business Rules Management System (BRMS)

12. Operational Data Store (ODS)

13. Real-time In-bound Marketing

14. Corporate Internet Banking

15. Fraud Detection System

28/8/201422

Done

Done

Done

Done

Done

WIP

Done

WIP

Done

SMU Master of IT in Business (Financial Services)

Master of IT in Business Programme (MITB) Courses

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A. Banking

Technology & Operations

B. Analytics

Technology & Applications

C. Information Technology

Management

D. General Management for

Technology & Operations

A.1 Banking Products &

Processes

A.2 Retail Banking Technology &

Operations

A.3 Corporate Banking

Technology & Operations

A.4 Financial Markets Technology

& Operations

A.5 Trading Technology &

Operations

A.6 Payment Technology &

Operations

A.7 Assets Management

Technology & Operations

A.8 Lifecycle Implementation of

Banking Products

A.9 FS Operational Risk I:

Foundation & Framework

A.10 FS Operational Risk II:

Technology, & Systems

B.1 Analytics Framework &

Business Context

B.2 Data Analytics Lab

B.3 Customer Analytics &

Applications

B.4 Operations Analytics &

Applications

B.5 Cloud and Big Data Analytics

B.6 Visual Analytics &

Applications

B.7 Text Analytics &

Applications

B. 8 Social Analytics &

Applications

B.9 Mobile Analytics &

Applications

B.10 Business Analytics

Practicum

C.1 * Innovation Management

C.2 Spreadsheet Modeling for

Technology & Operations

Decisions

C.3 IT Project & Vendor

Management

C.4 Global Sourcing of

Technology & Processes

D.1A/B * Financial Accounting

D.1C * Management Accounting

for Technology &

Operations Managers

D.2 * Strategy & Organisation

D.3 HRM for Technology &

Operations Managers

E. Capstone Project

E.1 Capstone Project

- Project Definition, development and critique workshops

- Industry expert seminars and company suite visits

E.2 Project Delivery

* = ½ credit course, 7 sessions per term

Bold = New courses phasing in from Aug 2013 onward

SMU tBank on the Cloud

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• Our long term plan is to deploy SMU tBankonto the cloud, and open it up for use by other Universities.

University

A

University

B

University

C

SMU tBank

Ngee Ann Poly,

starting Oct 2014

Singapore Poly,

(TBD)

Thank You

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