'No Hiccups'

By Mel Duvall Print this article Print

Service-oriented architecture has helped financial firms such as TD Banknorth neutralize integration headaches and make their legacy applications more responsive to customer needs.

'No Hiccups'

The new SOA-based online banking system went live in May with no problems, Petrey says. "There were no hiccups—none," he adds. The success was due in part to the fact that the SOA team cut its teeth on straightforward initiatives, but it was also a factor of the project's high visibility.

Still, the integration team learned some lessons. One challenge: figuring out the right modularity, or how basic to build each of the services. You can create a service, for example, that allows you to look up customer bank accounts. Or you can create a service with more functionality that will allow you to look up all accounts, such as mortgages, insurance products and credit cards. If you want to reuse that service in other applications, you may only need one part of that service.

"What you're after is creating services with a high reuse factor," Petrey says. "It took some time to figure out the right level of granularity."

Petrey says it's tough to calculate a return on investment for the bank's SOA strategy because the project is in its early days, when a large chunk of costs are incurred. However, in a recent evaluation of an SOA-based system to produce online customer account statements for a large financial institution, Jim Crew, former head of database operations for Merrill Lynch, pegged initial development costs at about $467,000. Payback over a 10-year period was estimated at close to $11 million, with most savings coming from reduced mainframe usage, which is typically charged back to the business unit. Crew is now an executive at SOA Software in Santa Monica, Calif.

Petrey reckons that application development time has been cut in half due to the ability to reuse Web services. That has been a major benefit as the bank looks to absorb its latest acquisitions, including the purchase earlier this year of Hudson United Bancorp and its 204 branches.

"It puts us in a position to integrate the applications we pick up from our acquisitions faster," Petrey says, "and with less impact on the customer."

At A Glance: TD Banknorth

Headquarters: 2 Portland Square, Portland, ME 04112
Phone: (207) 761-8500
URL: www.tdbanknorth.com
Business: Largest New England-based financial services company. Majority-owned subsidiary of TD Financial Group.
Chief Information Officer: John Petrey
Financials in 2005: $1.4 billion in revenue; $274 million in profit.

NEXT PAGE: A Check On 5 Banking Technologies

This article was originally published on 2006-10-02
Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.

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