Can SOA help lift the financial services sector out of its doldrums? The answer is uncertain. But SOA can go a long way in helping to streamline banking operations.
Earlier this year, Synovus Financial Corp., a provider of investment services, commercial and retail banking to 35 banks in the southeastern U.S., launched a consumer vault payment (SVP) platform for a new Automated Clearing House payment program. The project reduces consumer identity fraud risks, and gives merchants guaranteed payment from a consumer's financial institution at lower cost than credit card processing fees.
Synovus' effort was recently acknowledged as a best-in-class example in a competition by the SOA Consortium and CIO magazine. (ebizQ colleague Brenda Michelson talks about the competition here.)
Synovus partnered with NACHA, the Electronic Payments Association, and eWise, a financial software
provider, to create SVP, which has been rolled out to 37 financial institutions. The project will continue until 2012.
The project, as related by Esther Schindler in CIO, delivered some interesting payback, and made use of the SOA reuse ethic. The SVP application reportedly used 19 Web services, of which ten were reused from previous SOA implementations. Thanks to all this service reuse, project organizers judged that the cost and effort was 65 percent cheaper than a project from scratch.
Along with implementation cost savings, there was demonstrable payback in terms of revenue. SVP's had to deliver data quickly to and from merchants, billers, consumers and other financial information processors and merchant hosting companies. According to David Mize, Synovus director of architecture and development, payback is based on transaction revenue from sponsoring merchants and billers, as well as transaction fees from consumer payments and purchases.
Mize also observed that "your SOA environment is only as good as your most poorly performing service," and recommended that "companies adopting SOA put monitors in place to debug connection and data issues, such as real-time service statistics, network sniffers, and warehouse capabilities for service level agreement (SLA) management." Mize also emphasized the importance of SOA governance and architecture in reaching goals. "You don't have to get all of the things right on the first implementation. But you do have to get your architecture correct."
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