European banks had begun to embrace digitalisation even before COVID-19, but the pandemic proved without doubt to customers and financial institutions that digital transformation is the only way forward. This is for two main reasons – first, to ensure business reliability in situations like the pandemic, and second, because customers’ expectations moving away from traditional brick-and-mortar banking to digital services via web or mobile.
For 150 years Danske Bank has strived to be a driver of growth and development, focused on the ambition of becoming a better bank for everyone. To fulfil our ambition of being among the top two in customer satisfaction, the bank’s Technology & Services team leads several initiatives to modernise applications and put in place a data foundation that will create a better and more digital customer experience. One of these initiatives is the modernisation of the customer information core infrastructure that will help us release the potential of customer data to create digital banking services.
Customer information – the heart of
all the bank’s services and operations
Customer information is at the very heart of the bank, and the basis of all services offered to our customers. Whether to open a new account, buy insurance, issue credit cards, or even for marketing, customer information is required by every service and function of the bank, to serve customers and conform to regulatory requirements. Customer information is also the basis of strategic decisions, to inform the bank on aspects like designing new products, offers, or digital apps and services.
Micro-services based architecture makes customer information easily accessible for faster and new digital banking services
In the journey of digitalisation, enabling the easy use of customer information through APIs will unlock vital business growth for the bank, lead to better customer satisfaction through faster, simplified services, and result in cost savings from the efficiency of operations. To enable this, the Digital Core team undertook an initiative to modernise the core banking infrastructure that stores core customer data. They migrated the core banking infrastructure from a monolithic application with tight coupling and strong consistency to a modern application that is based on loosely coupled services in micro-services architecture.
Modernising the back-end infrastructure with micro-services-based architecture makes it easier for teams to manage their infrastructure independently and efficiently and keep the services running. By exposing APIs through an API Gateway service endpoint, multiple functions of the bank can automatically and safely access authentic customer data to run their services, and also allow them to create new digital services.
The modernisation will benefit customers and make our operations more reliable and efficient. As an example, any failure in the customer information infrastructure could cause our e-banking and net banking apps to stop working since they access customer information to log in. The move to micro-services architecture will minimise this risk and ensure no downtime, as the services are no longer hosted in one monolithic app.
A strong data foundation for digital services and customer satisfaction
To fulfill the ambition of creating a strong data foundation for the bank’s digital future, the team put a lot of thought into the business aspect and how APIs would be used.
Kristian Skriver Gandrup, Chief Software Architect & API Influencer
“We decided to use a domain-driven design approach where we discover business capabilities. These business capabilities would eventually turn into micro services supported by APIs.”
Mahalakashmi Karupanamy, Product Owner, Digital Core
is enthusiastic about the potential, “When anyone wants to build new products, they can find the assets they need to use, whether process-related or data, and within a very short amount of time, they will be able to deploy the product and put it into production. We are also working on API documentation to encourage self-service and a portal that will facilitate the knowledge that API consumers need to have. The portal will explain concepts like that of our domain model as well as technical aspects.”
Behind the scenes - making the change while keeping the bank running
Rolling out a migration of this scale, with a high level of management ambition was not without its challenges. As banking is an essential service, the team had to work on the migration while ensuring the bank was still running so that customer services and regulatory obligations were not compromised.
Kristian shares, “There is almost no application in the bank that does not use customer info in some way or the other. As a consequence, the customer information processes and infrastructure are in very high demand – this had implications on our ability to migrate because every day we get millions of requests. We couldn’t just unplug for some time, rewire things, and plug it back in – we could not compromise on the principle of ‘keeping the bank running. If we don’t open the bank tomorrow, whatever modernization we implement, doesn’t really matter. We also needed to ensure everything we do complies with legal requirements and the customer-facing products continued to work.”
Migrations steps had to be carefully identified to ensure the modernisation moved in the right direction, and at the same time allow existing legacy applications to continue to serve internal and external customers. In addition, as early adopters of the private on-premise Cloud platform, there were no mature solution designs to rely on, so the team had to develop infrastructure and applications from the ground up, Kristian explains
The team applied the Strangler Pattern, which is well known in operations like this, where features from the legacy system are replaced gradually and over time the new system eventually replaces all of the old system's features, strangling the old system and allowing you to decommission it. They identified migration steps along the way to ensure that the systems required to continuously run and serve internal and external customers were not impacted and could be migrated over time, as applications and services were built on the side.
Managing a project of this size and criticality also needed a planned method to manage the teams and talent required. Although the team began with a few people, it grew to a team of around 50 people, throughout the project. Bringing on new people into the project while ensuring that they didn’t lose momentum needed alignment. The team used coding conventions and knowledge-sharing sessions and systems, as well as tools such as Jira and Confluence to manage this aspect.
Ready for the API-led future of digital banking
“The modern customer information application based on micro-services lays the foundation for new and innovative customer services and digital interactions. As a first-mover in the modernisation journey, this project is an enabler for tribes and all banking processes. With everyone using customer data in some way or the other, customer information APIs will release the full digital potential of the bank for better services to customers today and for years to come. “ Sudhindra signs off.