The Banking Industry Architecture Network (BIAN) was founded in 2008. For years, it’s maybe been one of those ‘small but worthy’ financial industry trade bodies. But its membership has grown steadily as – one by one – bank and software vendors have come round to the idea that the industry does indeed require standard definitions for a service oriented architecture (SOA) for banking software.
And now BIAN’s clear focus on banks’ IT systems is pushing it centre-stage. It has now secured the membership of Misys, the leading trading and risk software vendor that is seeking a London listing that will value it at £3.25bn-plus.
BIAN now has 27 bank members and 43 software vendor members. Nordea, the Scandinavian banking group, also joined BIAN recently, and a number of large US banks are also planning on signing up, according to Hans Tesselar, BIAN’s executive director. “We are focusing on getting the largest financial institutions in the US and Europe to join and also on developing a larger footprint in Asia,” Tesselar told QA Financial.
The membership of Misys is some evidence that BIAN – an organisation that has no full time staff other than the tireless and affable Tesselar, who works out of a loaned office space at ING, the Netherlands bank – may be an idea whose time has come.
700 definitions
So what exactly are BIAN’s standards for SOA? At the core of its model for the interoperability of different software platforms is its Service Landscape, version 5.0 of which was released in September. The Service Landscape is based on definitions of 700 banking business scenarios defined business scenarios, which have been defined collaboratively by BIAN’s members. These scenarios cover around 90% of the functionality of banking software does, explained Tesselar, and that allows firms to integrate different software products and get them working together more quickly.
It’s no coincidence that the Misys’s decision to join BIAN follows its September announcement that it is moving its products onto an open architecture platform. Major software vendors such as Misys arguably have every interest in fixing industry standards for the core functionality of software, because it should make selling software and managing upgrades easier. But it’s only recently that Misys has become convinced that BIAN functional models were well-described and that BIAN had achieved a “critical mass” of members among banks and other vendors, according to Cormac Flanagan, head of product development for core banking at Misys.
“We’re seeing more banks referencing BIAN standards in their RFPs and we believe that industry standards for software architecture and APIs will happen in large part because of PSD2,” said Flanagan.
PSD2 is the European Union’s directive on payments and it is designed to open up payments markets to new competition, partly by forcing banks and other established players to share core customer data via secure APIs. That, according to Flanagan, will open up huge new opportunity for new firms to launch mobile apps to capture business from established players. Technology vendors stand to gain in a de-regulated marketplace.
“BIAN has been around for a while. It’s taken a lot of time for it to get to where it is,” said Flanagan. “But it now has critical mass. It is cross-industry and it’s non-proprietary. With PSD2 It could grow very fast.”
More generally, the move by banks to outsourced automated testing of their apps and APIs will be another major force behind the adoption BIAN standards, said Flanagan.
“There is fresh momentum behind BIAN,” agreed Hans Tesselar. “We now have more content in our model. We’ve moved to an implementation phase; we are no longer an intellectual exercise. And banks are buying more off-the-shelf software products. They don’t want to be locked in to one vendor’s standards and timeframes. They want standardisation and a common language.”
The organisation is currently surveying its members to find out what they want to prioritise next, said Tesselar. BIAN also needs to develop more expertise in the corporate banking and hedge fund markets, he added.
