Standard Bank, founded in South Africa 158 years ago, is one of Africa's largest financial services institutions. One of the bank's core divisions is Vehicle and Asset Finance and Fleet Management, where it offers a range of services that include asset based finance, commercial asset finance and helping fleet clients manage their operations and risk.
With a growing recognition that fleet management as an industry is ripe for disruption, thanks to vehicle sharing services and the potential of autonomous vehicles, Standard Bank knew that it needed to modernize its services and upgrade its technology platforms.
However, Standard Bank was grappling with an ageing mainframe system that was proving inflexible and limiting in its potential to adapt. Mainframes are also notoriously difficult to rip and replace, which is what led the bank to adopting a cloud-based API architecture that integrates the existing monolith into a new Digital Business Platform, using Software AG tools.
Darlene Minnaar, Enterprise Architect at Standard Bank, was speaking at Software AG's annual user event this week, ConXion 2021, where she outlined Standard Bank's ambitions and how it managed to build the new Digital Business Platform in a matter of months.
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The vision is to be the leading digital, analytics-led fleet management service provider in Africa. We believe to disrupt, you need an outstanding engineering practice to ensure that we are able to innovate, and our focus for the future is to go beyond financial services, and we will become like a virtual mall where our partners can participate and sell their products too.
Trends in the automotive market suggest that there will be a stronger move to car sharing, rather than car ownership, and starting with an architecture that was future ready was so important. We needed to ensure that we could connect easily with the industry partner ecosystems to respond to disruptions and also to disrupt in future. We need a strong API led strategy with reusable services that can plug into any channel in the future, as well as being cloud-based to ensure that we have quick deployment, and can scale and innovate.
We needed to change from being a transactional type of business to an insights driven organisation - and the imperative was we needed to have speed to market, of differentiated offerings, and be obsessed with clients needs.
Bridging the gap
Minnaar explained that the modernization programme was based on a strong partnership between business and IT, as there needed to be aligned objectives between the two functions. She said:
We all know that stakeholders across the group, across the value chain, have different objectives, and we need to make sure that there's a balance and that we can prove that we are addressing all of their concerns.
However, as already stated, the barrier for Standard Bank was the 35 year old monolith system, its existing mainframe, which had +/- 35 point to point integrations, with data that was inaccessible in real-time. Even if the data was fed into a data warehouse, it was 48 hours too late. The bank was also grappling with green screens that had long development cycles, with a high decency on IT, which made it very difficult to innovate.
Assessing how Standard Bank could move forward, Minnaar said:
We then went through a process to evaluate whether we could rip and replace. We even looked at some acquisitions. But in the end, we couldn't actually find any system off the shelf that could replace more than 60% of our mainframe functional value. So we had a refreshed look at how we can sweat the asset. We discovered that Software AG has technology that enables you to link your mainframe data and business rules to a digital platform that allows you to build a new digital offering.
Having discovered the potential of Software AG, Standard Bank undertook a technical assessment of the mainframe environment, where the group strategy was to reduce its footprint. Minnaar said:
From the tech assessment that we did, we understood what the costing would be and the timeline - and because it took about nine months, we decided to go with a two prong approach.
We did a proof of concept using the Digital Business Platform to develop the application, an application that would bring new value for the fleet clients. And the proof of concept was also to prove that we can speed up the development timeframe for any new offerings, compared to the mainframe environment.
We did it without integration first, we did it with file uploads to prove the point, and the next step after the proof of concept was to build the bridge between the mainframe and the Digital Business Platform, which is hosted in AWS. We used Software AG EntireX and SQL Gateway to expose the data and the business rules, with some additional technology we had to implement for security and firewall purposes.
Since the go-live Standard Bank has been working in partnership with Software AG, while the bank's people are trained on the new technology. The next objective is to converge the two environments into one cloud solution. Minnaar said:
From an IT point of view, we simplified the environment with a cloud hosted solution, as a managed service, so that our team can actually focus on developing new offerings and not be hassled with infrastructure support. We have opened up the data to the mainframe and exposed the functional services with direct APIs between the mainframe and the Digital Business Platform.
So in addition to creating a new value from a mainframe system. We are also able now to democratize the data from the mainframe by providing API products that we offer, and we will put that on our API marketplace. With the new business enabled platform we are gaining more and more partners that can co-create with us, with value that we can pass through to our clients, something that is offered to our fleet clients, and now all of a sudden be opened up to other Standard Bank clients, as well as employees, or even non bank clients.
One example provided by Minnaar is how quotations were previously having to be manually scrutinized by mechanics. However, after the straight through processing of APIs, Standard Bank has managed to change the ratio of mechanics needed to the number of vehicles, from one mechanic to 1,000 vehicles, to one mechanic to 5,000 vehicles.
On the continued benefits, Minnaar said:
We are now connected with a lot of industry partners, where we provide direct integration to the systems, enabling straight through processing, which provides value to the clients, value to the partners and value to the bank. Above all, we are now geared with the right technology that enables us to be responsive and allows for innovation.
On the business side, we have delivered all of the imperatives that enable us to offer our listing value proposition to our fleet clients, but more so, we can also now expand to additional markets with the same offering, and with minimal changes to those same APIs.
For more diginomica coverage of Software AG's conXion 2021 virtual event, visit our conXion event hub. The event will be live from October 5-7th and sessions will be available afterwards to view on-demand until the end of the year. Click here to register for the event and view the sessions.