A Computer Distributed Banking System - Term Paper Example

A Computer Distributed Banking System submitted Table of Contents 4 Overview of the bank infrastructure and network 5 Flow of business operations 5 Network characteristics 6 Description of the distributed system architecture currently being used 7 Offline detection and handling 9 Logical unit of work 10 Data Compression and Encryption 10 Desktop Management 10 Access Security Management 10 Problems and suggested solutions 12 Issues concerning the applications front end 12 Performance Issues 12 References 13 Abstract During the recent decades, distributed computing has become a common practice in IT industry. In the case of institutions having large requirements in terms of data volumes and transactions, as well with extensive geographical dispersal, distributed systems have proven to be one of the most popular options. In this essay we are going to present the architecture of the core banking system of a medium-sized bank, T-Bank. The core banking system that supports all main bank operations is a distributed client-server system that has a 3-tier architecture. The technical architecture of the system consists of an integrated environment that supports the engineering of distributed applications based on the client / server model. A Computer Distributed Banking System In this essay we are going to present the architecture of the core banking system of T-Bank. In the paragraphs that follow, firstly, we provide an overview of the bank infrastructure and network. Secondly, we present the general requirements of the system in terms of functionality, efficiency, reliability and consistency. Then, we describe the architecture and main features of the system, in relation to the requirements presented. Finally, the main functional and technical problems with the current distributed system architecture are presented, together with our suggestions for improving some of the issues described. Overview of the bank infrastructure and network Central departments and distribution of branches T-bank is located in ……………….. The bank’s personnel headcount is around 3000 employees. The bank consists of the central premises and about 250 branches (10 branches are larger and act as peripheral business centres of the bank serving large business customers while the rest mainly do retail banking) that are distributed in a range of about 700km. Central premises include the IT centre, the central management departments as well as the centralized operations department. Flow of business operations The main operations of bank are deposits and loans (mortgage, consumer loans, and working capitals). Deposits have the largest number of transactions per day, leading to high bandwidth requirements especially during the peak hours of the day. Loans generate smaller number of transactions, but require higher processing power. The loans approval process requires the sending of loan customer requests from branches to the central operations department where the customer loan requests are checked and evaluated. Loan requests that are approved are sent back to the branch for proceeding with the customer loan issuance and amounts withdrawals. A large number of batch program flows are required to run every evening as well as every end of month, in order to process the transactions data, implement account settlements, produce accounting entries, and various reports. The time window for the running of those programs is limited to a few hours, and for this reason high processing power is required to allow for all the programs to be executed and terminated on time, before the opening of the bank during the next morning. User roles The user roles of the system are associated to the various positions of the bank. For instance those roles include the branch tellers, the branch supervisors, the branch manager, the central department’s personnel, the loans evaluators at the centralized operations department. When a transaction is executed, the user profile is checked by the system, in order to validate if the user is authorized to perform it depending on the transaction type and amount level. An application of the bank is available for maintaining the bank’s positions, the employees’ assignments to positions, the employees’ replacements and the mapping of the transactions authorizations to those positions. Network characteristics The bank’s network consists of a number of 100mbps Ethernet LANs (Spurgeon), (one for each bank branch or division) interconnected by a 2Mbps frame relay broadband network. Frame Relay is a standardized wide area network technology that specifies the physical and logical link layers of digital telecommunications channels using a packet switching methodology. Frame Relay has become one of the most extensively-used WAN protocols. Its cheapness (compared to leased lines) provided one reason for its popularity. The extreme simplicity of configuring user equipment in a Frame Relay network offers another reason for Frame Relays popularity. (Frame Relay, Wikipedia) Main application needs Following are the main requirements of the system. - Efficiency. The system has to be support the operations of the bank in efficiently and robustness. The applications must be user friendly and the transaction time delays must be kept to a minimal even during the peak hours. In addition high system availability is absolutely necessary. Any delays in transaction execution, or system technical problems and downtimes cause serious problems to the every day business operations of the bank, and may have immediate consequences to its profitability. - Transactions management and logging. The system has to be transactional. Whenever a transaction is requested it will have to be logged and be available for auditing purposes by the bank’s external and internal auditors. - Data integrity is on of the most important requirements for a bank system. Whenever a transaction fails to fully execute, the data modifications that it invoked have to be rolled back. For this reason, the “commit” of the database modifications in the tables is performed after the completion of the whole transaction, to avoid data inconsistencies due to transaction failure that could lead to a situation where only some of the tables are updated and some aren’t. - Exceptional conditions handling. In the cases of exceptional condition, for example when a communications line goes down while a transaction is being executed the system requires the necessary mechanisms to handle the situation in a smooth and reliable way that will ensure the security, the data integrity and the database consistency. Description of the distributed system architecture currently being used The core banking system that supports all main bank operations is a distributed client-server system that has a 3-tier architecture that consists of the following layers: - Client Tier: The Client workstations that is a Windows XP workstation - Local Server Tier: LAN servers, located at the bank’s divisions and branches, are Windows 2003 server machines with Microsoft SOL Server 2003 Database (Windows Server 2003). - Central Server Tier: The Central Server that is an IBM Z/OS (successor of IBM OS/390) mainframe system with IBM DB2 Database (DB2 database, IBM) and CICS transactions system (CICS, Wikipedia). Communication protocol is LU 6.2, a protocol of SNA, the Systems Network Architecture IBM’s architecture for data communication between distributed systems (Duquaine). The current architecture of the bank is presented below in figure 1. Figure 1. The bank’s distributed technical architecture The technical architecture of the system consists of an integrated environment that supports the engineering of distributed applications based on the client / server model, from the system design phase to production. It is an open architecture, which enables portability of applications across hardware platform boundaries taking full advantage of the strengths of each. It provides an execution layer which improves navigability between applications and provides services to manage the most usual requirements of a Financial Information System. The technical architecture provides a number of services that fulfil the basic requirements of a core banking system, as described in the previous section of the document. Those are the following: Message Flow Control Message flow control guarantees the receipt of messages between clients and services, even in the case of communications difficulties or other exceptions. This functionality guarantees an adequate level of data consistency and allows process status determination at all stages in the event of a communications failure. It also allows automatic recovery of a consistent state of data across platforms, once communication has been recovered. Offline detection and handling When a communications line between a branch and the central system (mainframe) goes down while a transaction is being executed, the offline exception handling mechanism of the architecture handles the situation in a smooth and reliable way. The data messages that have remained “on the air” due to the communication failure are stored in a set of tables located at the branch LAN server. When the line goes up again, the messages are forwarded to the mainframe for the completion of the transaction. Transactions Management and logging The architecture of the bank supports the logging of the transactions both at local branch level and at central level. - At branch level, the architecture provides a LAN server database application that maintains the Electronic Journal of the branch (daily transactions log). Electronic journal tracks local business operations and provides a local totalling/reconciling mechanism that is used for closing the branch cashiers at the end of the day. - At central level, the architecture provides transactions logging in the Activity Journal at the central DB2 database, covering the accounting and auditing requirements of the bank. Logical unit of work Logical Unit of Work Integrity Management guarantees data consistency when updates from different services belong to the same business function. For each set of transactions identified as a logical unit of work, the architecture LUW mechanism is responsible for managing the rollback of all data modifications in the case that one of them fails to execute. (IBM CICS programming guide). Data Compression and Encryption The architecture minimizes the message size in order to optimize the response time as well as the communications cost. In addition to this the architecture calls additional 3rd party compression and encryption modules. Desktop Management This is a workstation architecture component that, via an access window, controls invocation of all applications, handles context data, receives user-to-user messages and handles the access to resources. Access Security Management Access Security Management, controls some aspects of security such as user identification checking or resource access security. The users identification to the system is guaranteed by a group of processes (connection, password change, password expiration) integrated across the system. Specific interfaces are provided to the LAN security manager and the host security manager. These remain transparent to the user. Resource Access Security controls the users rights to execute particular services, and the rights to access certain controls in a window. Authorization Management The authorization services of the architecture control the different levels of user rights needed to confirm or authorize transactions, maintains a record of transactions requested and authorized and allows authorization from remote nodes. Applications Architecture The specific technical architecture provides a development platform for developing banking Client/Server applications. The Client program executables are developed in Visual C, while the LAN server as the Mainframe server programs in COBOL language, as shown in figure 2 below. Figure 2. The bank’s application architecture Problems and suggested solutions The following problems of the existing bank architecture have been identified: Issues concerning the applications front end Visual C client programs are quite complicated. This results to a very high cost of maintenance. Any new software requirements require cost a lot in terms of effort and money. Also, due to the C programs complexity every new functionality requires very extensive testing before the rollout and it is still prone to errors. - Proposed solution: A possible solution would be to rewrite the banking applications front end using web-based technologies such as JAVA, and creating an interface for calling the server part of the applications, which is not possible to be modified due to the huge amount of code (millions of lines) that would have to be re-written. This is possible to be implemented due to the fact that the latest CICS Transaction Server enhancements have included support for Web services (CICS, Wikipedia) Performance Issues During peak hours there are performance problems in the online transactions take several seconds to execute, and this often causes problems with the bank’s customers. - Proposed solution: The cause of the delay has to be identified. In case that it is due to processing power problems, a tuning of the mainframe features has to take place in order to try to improve performance. In addition, database queries have to be checked in terms of performance by the technical department of the bank, and performance improvements can be proposed. In case that the delays concern the network lines, the bank Wide Area Network has to be revisited, in cooperation with the telecommunication vendor. The batch programs that are running in the end of month process of the bank often cause delays. If first day of the next month is a working day, the time window for running the batch flows is very limited and the timely run of the flows and the morning opening of the branches are often at risk. - Proposed solution: Improvements in the batch programs codes especially in the database queries can improve performance. In addition, more processing power of the mainframe can improve the speed of the processor. References Charles E. Spurgeon. Ethernet: the definitive guide. O’ Reilly Media Inc. First edition, February 2000. Web. 25 Nov. 2011. “CICS”, Wikipedia, The free encyclopedia, February 2009. Web. 24 Nov. 2011. DB2 database product documentation, IBM Corporation, 21 Noe 2011. Web. 25 Nov. 2011. “Frame Relay”, Wikipedia, The free encyclopedia, 22 Nov. 2011. Web. 25 Nov. 2011. Lawrence Chung. “Client-Server Architecture”. Computer Science Program, The University of Texas, 23-Mar-2000. Web. 26 Nov. 2011. “Logical unit of work (LUW) services”, CICS Application Programming Guide, IBM. Web. 25 Nov. 2011. Mahmood Akhtar, “Distributed Online Banking”, University of Illinois at Springfield, 2004. . Web. 25 Nov. 2011. Wayne Duquaine. “LU6.2 as a network standard for Transaction Processing”. Amdahl Corporation, UC–Berkeley, 1989. Web. 25 Nov. 2011. Windows Server 2003 product Descripton, Microsoft, 23 April 2003. Web. 25 Nov. 2011. Read More