Banking on Linux (page 1 of 2)

If they're familiar with the history of computing, they might flash a nostalgic grin for the legacy operating system, which many recognized as technically superior, but was largely squashed by the emergence ofWindows* in the 1990s.

For many branches constituting the worldwide banking sector, OS/2 continues to enjoy popular use, both as the software engine that powers many of today's ATMs, and as an OS that could scale from desktops to servers and has a reputation for high up-time and stability.

Whatever the OS, financial institutions are re-evaluating their branch technology investments since many legacy OSs are reaching end-of-life, phasing out support and institutions are realizing the need for a more flexible IT infrastructure to support the transition to on demand business.

Stacked atop OS concerns is the reality that the financial industry worldwide is in a state of rapid evolution, due in large part to deregulation and consolidation, which— combined with leaps in technology—continually spurs competition between banks. This competition requires those institutions to balance the need to control costs while simultaneously pushing to provide higher levels of customer service and satisfaction.

Making Change

For Milan, Italy-based Banca Popolare di Milano, one of the largest banking organizations in the country, with 600 branches and 6,300 employees worldwide, the inevitability of migrating forward from OS/2, coupled with the need to remain technologically competitive, prompted them to initiate an entire IT upgrade starting in December of 2002.

BPM is no stranger to the realities of consolidation. As a group comprising such financial institutions as Meda SIM Bipemme, Ges.Fi.Mi, Bipiemme Gestioni SIM, BipiemmeVita, Banca 2000 S.p.A and First Skelling Inter Finance Co.Ltd., BPM needed to ensure continuity within these disparate entities while providing the flexibility for further acquisitions down the road.It was a two-year upgrade process that replaced OS/2 with a mixed environment that leverages z/VM* and Linux* and consolidated multiple distributed servers onto two new IBM* mainframes.

Linux continues to emerge as a viable alternative for institutions—both financial and otherwise—that are looking to upgrade their IT resources. Linux is well suited for organizations looking for a solid return on investment, overall leveragability of existing and new resources and the ability to support service-oriented architectures. Linux also delivers the same legendary reliability and security that banks have depended on with OS/2.

As with most banks, BPM is driven to provide its customers with the technological conveniences, such as Web-based and telephone banking, which helps ensure their continued loyalty. Although such delivery channels have become commonplace, updating the IT infrastructure to accommodate the technologies can be a daunting proposition, particularly—as was the case with BPM—when the delivery channels had been deployed, one on top of the other, haphazardly and with little or no integration with the bank's branch operations.

BPM created hassle-free banking

The end result for BPM, not surprisingly, was a tangled system of transaction-processing offerings, making it extremely difficult for the bank to provide its customers with a hassle-free and seamless banking experience across its many channels. Customers conducting Web based transactions would have to wait for their transactions to be reflected in the bank's branch and telephone channels, ultimately leading to frustration for the customer as well as requiring additional IT and personnel processes to sort out the confusion, driving up overall costs.

"Our main goal was to integrate all of our channels so we could have a single view of our customers," says Clive Whincup, CIO of Banca Popolare di Milano.