Customer Solution Case Study
/ / Turkish Bank with Assets of U.S.$8.9 Billion Moves Core Banking to SQL Server 2005
Overview
Country or Region: Turkey
Industry: Financial Services
Customer Profile
Based in Istanbul, Turkey, DenizBank, part of the Zorlu Group, is one of the largest private banks in Turkey, with more than 5,000 employees, 236 branches, and assets of some U.S.$8.9 billion (at close of fiscal year 2005.)
Business Situation
DenizBank needed to move its core banking and related applications from a UNIX/ADABAS platform to a solution based on the Microsoft® line of server software, including Microsoft SQL Server™ 2005.
Solution
DenizBank is replacing its old application set with a Microsoft .NET-connected solution using SQL Server 2005 Enterprise Edition (64-bit) as the data store.
Benefits
n Ease of integration for a single unified banking environment
n Greater agility
n Support for high-volume transactions
n Easier data management with Table Partitioning
n Database Mirroring for high availability / “Our core banking environment was running on UNIX, but with UNIX we had scalability problems. We replaced our core banking platform with one based on Microsoft technologies, including SQL Server 2005.”
Dilek Duman, Chief Information Officer, DenizBank and Chief Executive Officer, Intertech
DenizBank, one of the largest private banks in Turkey, needed to find a more flexible infrastructure for its core banking to make it easier to integrate and deploy new solutions to help it keep pace with its rapid growth. The bank is replacing its old core banking platform, which was based on UNIX and the ADABAS database, with a new solution that uses Microsoft® SQL Server™ 2005 as the database and Microsoft development tools, including the Microsoft .NET Framework version 2.0. The company has found it significantly easier to create new banking applications since moving to SQL Server 2005 Enterprise Edition (64-bit) and the new development environment. The solution has given the bank a unified banking environment and the agility it needs to quickly develop new applications to respond to market opportunities. DenizBank plans to use SQL Server 2005 Database Mirroring to enhance high availability of its data.
Situation
One of the largest private banks in Turkey, DenizBank has 236 branch offices, more than 5,000 employees, 12 affiliate companies, and total assets of some U.S.$8.9 billion. DenizBank was established as a state-owned entity in 1938 primarily to help finance the newly emerging Turkish maritime industry. In 1997, DenizBank was privatized, and later acquired by Zorlu Holding.
In 2004, DenizBank was named the fastest and most consistently growing bank in Southern Europe, and the fifth fastest growing bank throughout all of Europe, by The Banker, a magazine of the Financial Times Group. DenizBank was ranked the eighth highest mover in terms of Tier-1 growth among the top 1,000 world banks according to the survey results published in the July 2005 issue of The Banker. The entire Turkish banking industry is seeing huge growth, with Turkey tied with the United States at the top of the fastest growing banks list.
Along with its track record of rapid growth, the bank is known for its integrity. DenizBank was named one of the most reputable financial organizations in Turkey in a poll conducted by the prominent business and economy magazine Capital. The bank earned profits of $166 million for 2005, a 61 percent increase from 2004. During the same period the bank enjoyed year-over-year total asset increases of 47 percent, total loans increased by 91 percent, and customer deposits rose by 33 percent.
DenizBank, and its 12 affiliates that together constitute the DenizBank Financial Services Group, is guided in its growth by four basic principals:
n Maintaining a disciplined credit culture and effective risk management
n Keeping costs under control
n Marketing concept focused on customers and niches
n Viewing distribution channels as portals to enhance the customer experience
Implementing these principals, and supporting rapid growth, requires DenizBank to have an IT infrastructure that provides the robustness needed for core banking functions and the flexibility to enable the bank to swiftly deploy new financial products and services for its rapidly expanding customer base.
DenizBank had been running its operations, including core banking, using Quantis Banking Software, a UNIX-based banking application developed by the bank’s development partner Intertech in 1992. The bank deployed the early Quantis solution using ADABAS, a nonrelational database.
Quantis, which has also been deployed at other financial institutions in the country, had performed well for the bank, but the UNIX-based application was difficult to customize and expand—hindering the bank in its dedication to swiftly provide customers with new products. It was also difficult to integrate with Web-based products, something that was essential for providing portal-type access to customer information from a single point and access to all applications from a single interface.
It was difficult to integrate the UNIX-based application with the bank’s extensive and growing use of Windows®-based applications and servers. The solution had limited scalability—a major problem for the rapidly growing DenizBank. It was becoming more difficult for the UNIX-based system to run end-of-day and end-of-month operations within allowable timeframes.
As DenizBank looked ahead, it needed to upgrade its core banking and supporting infrastructure with an IT solution that would help it:
n Provide a single unified banking platform to serve all of the bank’s distribution channels—including branch offices, kiosks, ATM machines, Internet banking, interactive voice response (IVR) call centers, and mobile solutions.
n Gain the agility it needed to quickly respond to market opportunities.
n Support high-volume transactions with low latency.
n Enhance data management.
n Support high availability.
Solution
Working with its partner Intertech, DenizBank created Intertech Financial Advanced Computing Environment (inter-F.A.C.E.), a new banking solution to replace its UNIX-based application. The bank decided to create inter-F.A.C.E. using Microsoft® servers, applications, and technologies, including Microsoft SQL Server™ 2005 Enterprise Edition (64-bit) for its database running on the Microsoft Windows Server® 2003 Enterprise Edition (64-bit) operating system.
Solution Development Environment
The solution was created using the Microsoft Visual Studio® 2005 development system and the Microsoft .NET Framework version 2.0 for the development environment. The .NET Framework is an integral component of the Windows Server operating system and provides a programming model and runtime for Web services, Web applications, and smart client applications.
The bank and Intertech decided to build the new banking solution using Microsoft products because it was pleased with how Microsoft products performed in other areas of its operations, and because it sought easier integration.
DenizBank and Intertech started analysis in April 2005, and the coding of the new inter-F.A.C.E banking system began in June 2005. For this project, a team was set up within Intertech; the team consisted of approximately 30 software developers and 10 analysts, all with deep experience in creating banking applications. Just five months later, in November 2005, the new cashier application was complete and rollout began to the branches.
The developers are creating a suite of applications to provide the infrastructure for the entire banking system. The first phase of development, which has already been completed and deployed, includes:
n Customer Definition and Relation Management
n Teller Transactions
n Deposits
n Utilities Payments
n Relevant Management Information Reporting
“We started with the cashier screens, but when we were working on them, we also developed the accounting infrastructure, account infrastructure, current accounts infrastructure, and actually the whole infrastructure of the banking system,” explains Murat Tekcan, Manager of the Alternative Distribution Channels at Intertech.
DenizBank continues to roll out new inter-F.A.C.E. modules, from a lineup that includes:
n Consumer Loans
n Corporate Lending and Financing
n Contracts & Collaterals
n Local Payments and Collections
n Sales Force Application
n Standing Orders
n Cash Vault Management
n FX Transactions and SWIFT Integration
n Local and Foreign Check Processing
n Promissory Notes
n Treasury (Front Office, Mid Office and Back Office)
n Trade Finance (Imports & Exports)
n Batch Operations
n Risk Management
n Management Information Reporting
The older Quantis application continues to be used in parallel with inter-F.A.C.E., and is scheduled to be unplugged upon deployment of the final inter-F.A.C.E. modules, set for mid-2007.
Solution Architecture
The solution uses an n-tiered architecture:
n Presentation tier. Cashiers and other bank employees access inter-F.A.C.E. through the presentation tier, which uses a thin-client architecture. Windows Authentication is used to support a single-sign-on experience for the secure intranet.
n Application tier. The application tier hosts DenizBank’s growing set of inter-F.A.C.E. modules that were created using Visual Studio 2005 and the .NET Framework version 2.0. The applications are created as server-based Microsoft ASP.NET pages that take advantage of modern browser capabilities and provide a rich user experience. The application tier includes all business logic and transactional structure, and provides a strong logging mechanism, efficient caching, and secure access to the database.
n Database tier. A single instance of Microsoft SQL Server 2005 Enterprise Edition (64-bit) supports the online transaction processing and storage for inter-F.A.C.E. applications. The Table Partitioning feature of SQL Server 2005 is used on the largest table, Accounting Entry, which has 270 million rows and 200 gigabytes (GB) of data. The bank plans to use the Database Snapshot feature of SQL Server 2005 for point-in-time reporting. High availability is ensured using an active/passive two-node cluster, and the bank plans to provide an additional layer of high-availability protection by deploying the Database Mirroring feature of SQL Server 2005.
The database tier is hosted on an Intel Itanium-2 based HP Integrity Superdome server, using 8 processors and 32 GB of RAM. The Superdome also dedicates 4 processors and 32 GB of RAM to a data warehouse hosted on a separate instance of SQL Server 2005.
Benefits
DenizBank has enjoyed a number of benefits since deploying SQL Server 2005 and its inter-F.A.C.E. solution, including ease of integration for a single unified banking environment, greater agility to respond to market opportunities, support for high-volume transactions, and easier data management with Table Partitioning. The bank also plans to enhance its high availability by deploying Database Mirroring.
Ease of Integration for a Single Unified Banking Environment
Moving to SQL Server 2005 and the new inter-F.A.C.E. solution is giving DenizBank the ease of integration it required to create a single unified banking environment. When the final inter-F.A.C.E. modules are deployed in 2007, DenizBank will have all of its core banking functions, plus a wealth of supporting applications, running on SQL Server 2005 and associated Microsoft servers and technologies.
“Our core banking environment was running on UNIX, but with UNIX we had scalability problems,” says Dilek Duman, Chief Information Officer, DenizBank and Chief Executive Officer of Intertech. “We replaced our core banking platform with one based on Microsoft technologies, including SQL Server 2005. We will not use the UNIX environment anymore, but provide a fully integrated banking environment on the Microsoft platform.”
The move to SQL Server 2005 for core banking and related applications makes it easier to integrate with the rest of the company’s infrastructure, which was standardized on the Windows operating system after the company studied various environments in 2004, looking at costs and benefits in achieving the company’s IT goals. “From our studies, we concluded that Microsoft provided the preferred platform and that we should use SQL Server as the database and Microsoft Visual Studio and the .NET Framework as our development environment,” says Murat Tekcan, Manager of Alternative Distribution Channels at Intertech.
“SQL Server 2005 and the rest of the Windows platform gives us exceptional integration, which greatly simplifies the process of continually updating the services we offer to our customers,” says Ersin Unal, DBA Manager, at Intertech. “For example, our new Customer Definition and Relation Management module provides a SQL Server database that is accessed by 15 other applications. Our customer data is more accurate because all applications—whether supporting a branch office, a call center, kiosk, or Internet banking—use the same central data store for creating new, or accessing existing, customer information. This integration makes it easier to develop and deploy new customer solutions because applications can be designed to take advantage of this central database.”
The Windows environment gives the bank the IT infrastructure it needs to support change and rapid growth. “Using integrated technology from just one vendor, as widely as possible across the organization, has made it quicker to develop new projects and see them to completion,” says Duman. “We can better plan our operations from a technical point of view and get advice on future technology roadmaps and what products to use to achieve the most business benefits.”
Integration has been simplified through using SQL Server 2005 Integration Services for enterprise-grade extract, transform, and load (ETL) processes. “We very much like the new Integration Services of SQL Server 2005 because it works so well with Microsoft .NET programming,” says Unal. “We’re loading data feeds through programs rather than running packages. With the earlier ETL tool we had to either schedule jobs or use batch scripts. We didn’t have a comparable control to what we have with Integration Services. With Integration Services we can program in Visual Studio, create Integration Services objects on the fly, and execute them. This is much more efficient.”
All of the attention to integration is paying off with a better customer experience. “We’ve made work easier for our cashiers, which translates into a better customer experience,” says Tekcan. “With the old system our cashiers had to work with one user interface to access customer information, another interface to work with banking information, and a third if they needed to access documents. Today we have migrated all of the banking screens to the same inter-F.A.C.E. infrastructure. This is great for the branch offices because they can now serve all of the customer’s needs from a single integrated user interface, which means customers get what they need faster than before.”