Web services bring efficiencies to regional bank

Huntington National Bank's IT budget used to be devoted to maintenance. Since moving to a service-oriented architecture approach and developing Web services, the bank is finally spending money on innovation.

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Huntington National Bank senior vice president of retail banking Tim Scholten knows an untenable financial situation when he sees one.

Take for example the state of the bank's IT budget three years ago when very little was dedicated to innovation, instead 85% to 90% was spent on maintaining systems -- "break-fix" as Scholten put it.

Web services and financial services: A natural fit

The financial services market is rife with mergers, often leaving institutions with a glut of mismatched IT infrastructures and legacy systems. Executives often point to this as the primary reason why Web services have found a home in the market.

Huntington National Bank of Columbus, Ohio, has made use of Web services and a service- oriented architecture to integrate disparate systems from its 300 regional offices and return a consistent view of data for its customers and employees.

"We can make a single change one time and it affects the rest of the channels," said Tim Scholten, senior vice president of retail banking.

Customer expectations, meanwhile, have changed with the advent of Internet banking. Banks can no longer to architect their infrastructures for 9-5 banking, then switch those systems over for overnight batch processing.

"The Internet has changed things, and banking is a 24-hour business," said Randy Orkis, chief technology officer of service provider Synoran LLC. "You need a middleware tier infrastructure to make that happen."

The reason we went down this path is that 85% of what we were doing was to support our infrastructure. We didn't have the bandwidth to do anything exciting," Scholten said. "Our resources were dedicated to maintaining our infrastructure."

In the meantime, the parameters of banking were rapidly changing. Online banking virtually eliminated the 9-5 concept of banker's hours, as customers were making transactions round the clock and putting the onus on Huntington to provide the necessary services.

"We had to think differently about how to manage our services architecture to be competitive," Scholten said.

The response was to adopt a service-oriented architecture (SOA) and create Web services that could be reused by each of the Columbus, Ohio bank's 300 regional offices. Those services include an online banking application, an online teller, an enterprise customer service platform, a sales and services platform and a call center. Now, for example, customers making a withdrawal from an ATM see their balance in real time, and it's the same balance they would see if a balance transfer were made from their home PC or from any of the bank's 300 branches.

"We are achieving a number of efficiencies by reusing applications," Scholten said. "Speed to market is a big benefit. Our online application [the first services application] rolled out slowly, but the teller app was delivered in half the time because we reused the work we had already done." Scholten also said that real-time balance returns and other services have cut down on cries for help to the bank's call center.

Scholten teamed with Synoran LLC, a software vendor and services provider that added its MaxFI integration engine to IBM WebSphere to provide a middleware tier to Huntington's infrastructure. Scholten's development team then built the bank's applications and services on this tier.

Synoran's core business is providing "vertical expertise" on top of IBM products for the retail banking industry.

"The biggest challenge on the technology side is leveraging the layered architecture," said Synoran chief technology officer Randy Orkis, who was also the former CTO at Huntington Bank." Adding XML semantics gives it a level of de-coupling."

Orkis also said developers have to understand the organization's business model in order to unify several business channels into one.

"You have to agree on the business rules of the enterprise ahead of time," Orkis said. "The big challenge, for example, is how you want to represent a customer's available balance, which can be different at each channel. It's a challenge because bank's aren't organized that way. On the development side, you need the same kind of mindset to lay down an architecture for those services."

Huntington's developers, meanwhile, were not bogged down by the "Not-Developed-Here" syndrome that can hamper some SOA implementations in which developers are unwilling to reuse code developed by others. Huntington had an SOA vision three and a half years ago, and its developers have made it a reality, Scholten said.

"It hasn't been an issue. We started off with a few developers working on one project, and as we expand the services we build, they are learning new trends, new technologies and new standards," Scholten said.

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