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12:05 PM
Bryan Smith
Bryan Smith

How Do Banks Maintain Financial Data? Mainframes

With their speed, capacity, intelligence, and security capabilities, mainframes remain a core component of banking data practices.

What sort of computer powers $23 billion of ATM transactions every year? Here's a clue: It isn't a white box server.

Since its introduction 50 years ago, the mainframe has played a vital role in the financial industry. Some of these services are so fundamental for everyday business that we take them for granted, from the large computer in the IT department to the convenience of using an ATM. Both provide results that are so seamless and reliable that the work behind the scenes is ignored.

In fact, the "secret" work of mainframes dwarfs the scale of data-processing tasks that are considered epic in the popular imagination. Google searches occur at a rate of 60,000 per second. Mainframes, in contrast, handle more than 1 million customer transactions per second. That's one reason mainframes remain a core component of banking data practices.

Banks and other financial institutions rely on speed, capacity, intelligence, security, and accountability for success. Let's look at the huge role mainframes play in helping financial companies achieve these goals.

Speed: Consider just a portion of the transactions that the finance industry handles: ATM operations, credit card usage, and the management of investment capital. All require instant response. Oh, by the way, the current mainframe processors are supporting speeds of 5.5 GHz -- the highest clock speed CPU ever produced for commercial sale.

Capacity: Speed is critical for financial data delivery, but the ability to handle volume is equally imperative. Financial transactions create massive, constant demands on data infrastructure, and the scale of traffic varies depending on predictable and unpredictable factors. Mainframes offer a classic resource for this contemporary challenge -- a dedicated amount of processing power that can handle dynamic scenarios reliably.

Intelligence: Delivering accurate, timely results alone won't guarantee prosperity for a bank or investment firm. Data requires many different types of analysis, from investment insights to consumer banking trends. Analytics tools are only as powerful as the resources available to query mountains of data. Just as with transaction speed and volume, mainframes are often the best way for banks to handle the huge requirements of data analysis. A single device with predictable mammoth computing capabilities often comes in handy.

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Security: The mainframe's reputation for network security is especially timely as the finance industry actively explores ways to defend customer data against hackers and cybertheft. While evaluating the potential security risks and rewards of cloud-based methods for the industry, financial leaders are using known resources every day.

Accountability: Even if a corporation delivered on all of the above, an investment scandal or other blow to credibility could quickly erode value and trust. The ability to monitor all of a company's activities and detect unusual practices or trends -- before they turn into external problems -- is a gift. The purpose-built audit and security management delivered by a mainframe is ideally suited for this sort of collective analysis and oversight.

Availability: Not being able to check account balances or get money from an ATM is a good way to prompt customers to switch banks. Many compute-clustering technologies have tried to duplicate mainframe-based high availability architectures, but none have matched the capability that tolerates both hardware and software outages and upgrades without putting a "Closed" sign on the ATM.

In this era, when a brand-new phone model is obsolete in six months, the impulse to dismiss or forget the tried and true is all too easy to follow. Fifty years in, mainframes are more than major parts of the IT equation. They keep the dollars moving from wallet to wallet.

Bryan Smith focuses on IBM mainframe solutions at Rocket Software, a global software company that has developed mainframe tools and solutions for the world's leading businesses for 24 years. View Full Bio

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