Mainframe modernization patterns for financial services

Prima facie observation is that financial services organizations have been pioneers in adopting technology to help reduce operating costs, bring innovations faster and provide better customer experience. For many, IBM Mainframes have been part of their core IT platform for over five decades due to powerful processing power, reliability and security. Even today, 85 of the top 100 banks use mainframes to run their mission critical IT workloads.

The new competition from FinTechs and BigTechs, evolving business models and regulatory and compliance risks are driving changes in financial services industry’s technology needs. They are looking for a modern platform which can provide agility, security and scalability at a lower cost. They are investing in cloud computing and have started moving their non-critical workloads to cloud. Some of the organizations are already underway moving critical user facing applications and data to cloud to provide faster time to market, better user experience and improved scalability without comprising on security. However, some may still be reluctant to migrate mission-critical mainframe workloads to cloud due to risks of migration failure, very long migration timelines and little or no know-how of the old processes which may make the migration difficult.

Some of the challenges that organizations may face with the mainframe platform motivating them to look for alternatives are:

• Shortage of skilled resources
• Outdated tools and development environments
• Manual Development and Operations processes
• Limited access to application and data causing interoperability issues
• Inability to unlock the value of massive business data stored on mainframes
• High cost of operation

Several of these challenges are perceived rather than real. Many of the financial services organizations have not refreshed their mainframe tooling and technology stack over a decade and continue to run it as a legacy platform. With the release of z13 in 2015, the mainframe platform was redesigned to bring many innovations and modern tooling. IBM has been continuously investing in modernizing this platform with the release of z14 in 2017, z15 in 2019 and z16 in 2022. With each version, the modern mainframe hardware and software was designed to provide enhanced security, speed, resiliency and modern tools to interoperate in a Hybrid Cloud ecosystem.

The Hybrid Cloud infrastructure is a combination of one or more public cloud, private cloud and on-premises infrastructure. The hybrid cloud has the potential to facilitate faster code development and reduce time to market due to automation, consistent use of tooling and DevOps practices. We find that most organizations are embracing hybrid cloud strategy as their preferred cloud deployment model. The mainframe platform will continue to be an important part of this strategy and organizations need to start thinking long term on what should move to cloud and what can stay and be modernized on mainframe.

Capgemini and IBM help financial services customers navigate through their mainframe modernization journey. Capgemini provides a balanced approach towards mainframe modernization by choosing the right workloads to migrate to public/private cloud along with identifying in-place modernization patterns to modernize mainframe workloads.

The Capgemini In-place mainframe modernization solution focuses on modernizing developer experience, bringing agility and speed of delivery, providing real-time access to application business logic and data, and bringing AIML and data analytics closer to source data. Capgemini has created a mainframe modernization Experience Zone where customers can experience these modernization use cases in action and co-develop their use cases with Capgemini mainframe experts before implementing it in their environment.

Learn more on each of these use cases by filling out the webform and downloading our Point of View.