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AN EASY WAY TO MODERNISE LEGACY COMPUTER CODE

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– Emil Eifrem, co-founder and CEO of Neo4j,

 

Data expert Emil Eifrem explains how graph databases helped one of the world’s largest investment management companies overhaul their old systems

Numerous banking systems in use today date from the 1970s. And while many of these workhorses are functional, it’s getting more and more problematic to update or modify them.

In the worst cases, an upgrade means compromising a bank’s operations while an important upgrade is being implemented. After all, technology underpins every major banking process and requires the best infrastructure to serve today’s digital customers.

Ageing systems not only drive banks’ day-to-day operations, but also serve as the core IT enabler for new capabilities and growth. Yet many financial service institutions – even tier one, global operations – are saddled with outdated systems and architecture. At a time when banks face competition from standard and digital competitors, this presents a substantial challenge.

In an ideal world, full replacement is the best way to reduce complexity and better support business growth. However, such plans rarely leave the drawing board given the high costs and risks associated with such a course of action.

As a result, incremental change through upgrading and improving the underlying code is emerging as the pragmatic best practice. It’s an approach that is working well for investment management firm Vanguard.

 

Emil Eifrem

Digital Transformation at a Large Investment Management Firm

Vanguard is one of the world’s largest investment management companies with more than $3.5 trillion in assets. It’s also the largest provider of mutual funds and the second largest provider of exchange-traded funds.With 17,600 employees, Vanguard serves more than 20 million investors in about 170 countries. Its founder, John Bogle, actually invented the concept of index funds.

Vanguard was able to move to a modern, microservices-based infrastructure by improving the management and quality of its legacy Java code base. Managers deemed a digital transformation was necessary, but some of those legacy Java archives had 4 million lines of code, much of which was redundant and  needed to be pruned.

“Managing code is critical,” says John Lavin, Software Architect at Vanguard. Lavin points out that while companies like Vanguard focus on feature delivery, time to market and getting things out the door, “if you don’t make it easy to manage code, none of that gets done.”

Moving Java archives into microservices, however, requires managing a lot of moving parts, he adds. To tackle this, the team had started by managing services in a spreadsheet, compiled over the course of a year.

“We had a lot of different services in a lot of different states,” he said. “We tried to group things and document dependencies as best we could in the spreadsheet. But it really just wasn’t going to work.We realised that the management of our modules and services was really a ‘graph problem’.”

Graph databases are used to model complex problems more easily than other database approaches, in particular standard relational technology. Modeling this complexity using relational databases results in lengthy queries which are technically tricky to build and expensive to run, with performance faltering as the dataset size increases.

 

A Better Future?

Lavin and his team started with a simple graph data model, which allowed them to model the logic and connections inside their computer code, a productive way of managing, reading and visualising all this information. Even better, by using graph analytics, the team was able to measure their code against current software engineering best practices to see what needed to be improved to bring it in line with today’s standards.

In a very short time, the team was able to visualise relationships and reduce risk by simplifying and clearing up the code’s internal workings. Through the use of graph database technology, Vanguard’s IT team was able to gain full visibility into its heritage application, enabling it to perform impact analyses and fully modernise these older systems in a safe, phased way.

Internal stakeholders are also able to track progress, as graphical tools present, in a simple but highly accurate way.

“Our managers go right to the dashboards to see whether their metrics are trending up or down,” Lavin said. “Graph technology gives us a great way of pulling these metrics up, and keeping our code clean, because we’re all looking at it.”

And now, it’s not just about modernising old code. Graph database technology is now powering the future of application development at the company.

“When a project team goes into their planning sprint, we provide information about which services to use, where those services are being used, what’s partially built out and where developers may add their logic so that it makes sense in our overall architectural scheme,” Lavin confirms.

A low-risk, phased approach to modernisation using the modelling and analytical power of graphs may well prove to be the safest way of bringing 20th century banking systems safely into the modern era.

 

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Business

TAKE THE NO-CODE LEAP TO DIGITAL INNOVATION WITH A FUSION TEAM

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Chris Obdam, CEO, Betty Blocks

 

In the last couple of years, a new sector has emerged alongside enterprise financial organisations—an ecosystem of fast-growing Fintech startups that develop innovative solutions for the banking sector. These small, flexible startups and scale-ups began filling a gap the ‘big boys’ left quite some time ago. Then, they gained even more ground during the pandemic. According to KPMG, Fintech investments worldwide amounted to $98 billion USD in the first half of 2021, compared to $121.5 billion over the whole of 2020[1].

 

The massive surge has financial regulatory bodies scrambling to balance the benefits of modernising the industry with the necessity of strong oversight. But, what if traditional financial enterprises could combine their durability, reliability and years of experience with the flexibility of a startup? They can! More and more enterprise organisations are becoming agile, empowering digital-savvy colleagues and improving competitive value.

 

Fusion teams

Their approach? They break through patterns and almost literally through walls in their organisation. The most successful organisations team up with genuine problem solvers. It’s a solution-oriented approach, which can be really successful if governed the right way. We like to call it a fusion team, a team that empowers digitally-skilled and solution-oriented employees to work side-by-side with the IT department while using a low-code and no-code development platform.

 

Citizen development

A fusion team brings together people with diverse professional backgrounds who use data and technology to achieve shared business outcomes. Ideally, a fusion team combines pro-developers with citizen developers. A citizen developer is a business person without coding experience that builds apps using a no-code or low-code platform.

The purpose of the professional developer, in a fusion team, is not to train the citizen developer to become a pro-developer but to bring guidance and governance to the project. Before building successful software, a fusion team will require knowledge and guidance through the software development life cycle (SDLC) phases. IT feedback is crucial to helping a fusion team understand what makes good software and how new platforms can (or cannot) integrate into an existing system. Citizen developers should receive coaching to make decisions that lead to architecturally sound, value-adding applications.

 

What are the challenges that a fusion team can tackle?

  • Modernisation of legacy systems. Many banks have been around for years, expanded their software, but regularly have to deal with legacy systems or even a vendor lock-in.
  • Regulations can change fast; that’s why financial organisations need to increase flexibility and improve adaptability. A flexible layer on top of core systems or legacy systems can profit the whole organisation.
  • Counter shadow IT. Thousands of employees means that a lot of solutions are single handedly-built. All these solutions can be beneficial for the employees and even for your customers, but the thing is that they are not checked and governed by IT. For example, you run the risk that they are not meeting all your security requirements.
  • Digitisation of processes, like the onboarding process for customers, is still a long paper process within financials. What if this could be 100% digital and automated? This could save you a lot of repetitive work, energy and money.

 

Create an environment for innovation

Banks tend to have difficulties setting up the right conditions to empower the workforce to innovate towards the future. Our first reaction to possible security risks is to impose more rules and restrictions, while the solution lies in a coaching attitude, independent of strict regulations. You can empower digital transformation by using a no-code or low-code platform.

A fusion approach encourages better software governance, allowing IT to help mitigate the risks of shadow IT projects. With a no-code or low-code platform, you can combine existing secure systems, extract data more efficiently, effectively communicate and convey between systems and thus better manage qualitative information. Governance is not a simple process or a task to check off and forget about; the essential governance feature for low-code or no-code development is a platform provider with the flexibility to adapt to specific needs of an enterprise. The provider should be a partner in expanding the role of citizen developers within the organisation.

Taking the leap into no-code software development with a fusion team will empower the entire organisation in digital transformation. It’s a strategic move that helps enterprises become more resilient against unexpected challenges – such as a pandemic or new consumer demands. Furthermore, you create a modern and innovative working environment with digitally-capable and engaged employees.

 

[1] Source: KPMG:

https://home.kpmg/nl/en/home/media/press-releases/2021/09/record-fintech-investeringen-in-eerste-helft-2021.html

 

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Business

IDENTITY SECURITY IN THE ERA OF SOX

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By Steve Bradford, Senior Vice President, EMEA, SailPoint

 

The Sarbanes-Oxley Act (SOX) is a federal law that mandates practices in auditing and financial regulations for public companies. Its original intent being to restore trust in a corporate and financial system that had been rocked by major accounting scandals such as Enron, WorldCon and Tyco. Legislators believed if there was no trust in the major corporate institutions of America, then the whole fabric of capitalism could be brought into question.

Initially only applying to American companies, every major institution that dealt with America had to comply with SOX. It was a huge a success with the number of financial scandals emanating from the US dropping dramatically since compliance. But can The UK follow suit?

 

Preparing for “SOX UK”

The UK has had its own high profile business collapses – notably BHS and Carillion. So, the government has launched a consultation programme that mimics the US SOX rules. The consultation on reforms aims to ‘restore trust in audit and corporate governance’ and applies to auditors, companies, directors, audit committees, investors, other stakeholders, and the regulator.

A focus is on companies with a significant public interest, otherwise known as Public Interest Entities (PIEs). These include financial institutions, banks, insurance companies, underwriters, and alike – many of which are already familiar with a high degree of financial scrutiny. A noteworthy difference is the stated preference to expand the UK SOX controls beyond public interest companies, which could include large companies in retail, manufacturing, logistics and automotive.

UK SOX may seem like a massive undertaking if unfamiliar, but with the right technologies in place manual tasks can become automated, reducing time which can be then redirected to greater priorities or risks, and everyday operations will be guided by a strong set of well-defined controls.

 

A growing threat

The Sarbanes-Oxley Compliance 9-Step checklist provides a series of recommendations to protect the validity of all reported information and help businesses to ensure they are following the rules. This includes the need to establish controls to prevent data tampering, track data access, test the effectiveness of safeguards and detect security breaches – any of which need to be reported to SOX auditors on time.

As both physical and digital information are affected, accurate management is an integral part of compliance. Remote working, blockchain integration, and the emergence of cloud-based banking (Banking as a Service) have led to growing cyber threats, privacy concerns and compliance requirements through the complexities of connectivity.  For example,  multiple devices now connect to networks from different locations, accessing the vast amount of information in the cloud. There is now critical need to close security gaps outside the perimeter.

Some of the greatest threats lie within an organisation – either human error or more likely, the rise in risk facing the access today’s workforce has to technology. Complex corporate structures and departmental silos hinder management’s visibility into workforce roles, responsibilities, and data access. Traditional reliance on spreadsheets and manual processes for tracking data access and user identities leads to inaccuracies and inconsistencies.

Apart from being an auditing and reporting nightmare, the situation creates system gaps that are ripe for exploitation by threat actors.

 

Maintaining security through identity

To meet security and compliance regulations, companies and organisations must act smarter in how they protect their “perimeter”, which is centred on its people – the new threat vector of choice. Companies must prepare to automate business processes and embrace new security practices that fully protect the workforce and the tools they need to  do their job.

Staying in compliance with regulation is important for the safety of the company, but it is crucial that the right safety measures are in place. Identity access management can reduce the risk of insider threat, data breaches and human error for financial reporting – enabling automated logging and report generation for companies to make smart decisions whilst uncovering and remediating hidden or unknown issues that pose inherent risk.

 

The countdown to SOX

One commodity companies don’t have is an abundance of time. With less than 18 months to go until the SOX recommendations deadline, any form of automated access system is an essential first step in ensuring companies are prepared. Starting early is critical – given an implementation programme can take 18-24 months for a company that is used to stringent financial regulations. It’s time to get identity and access compliance right – automation can save a significant amount of effort and money, whilst improving the accuracy of identity management processes.

As seen in the US, UK companies not used to financial compliance procedures will have to catch up or ask for help – learning from the financial sector – and scale up their auditing and control to comply with more stringent regulations. The rules are there to help provide the security that regulators need for a secure commercial environment. Now is the time to act in order to reduce the risk.

 

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