A few days ago, I discussed application architecture in banking with a banking software vendor. Starting from there, we had a look at that vendor’s core banking solutions and further back-end systems, such as trade finance. The vendor quickly suggested that its solutions align with Forrester’s concept of a lean core. Now, you may ask yourself: Why is this relevant? Or — if you already know the lean core concept — is the vendor correct?
For those of you who don’t know Forrester’s digital banking platform architecture (DBPA) yet, let me explain the concept of DBPA and the lean core in a nutshell: It’s about splitting what’s traditionally considered core banking (and further back-end solutions) into two decoupled elements: the lean core and the digital core. The lean core focuses on data availability and consistency. On top, the digital core delivers domain-driven, highly coherent business capabilities (for example, for the customer domain) using data that the lean core provides via APIs. The architectural structure also allows traditional and DBPA-based applications to coexist during a continuous transformation journey and to work in banking ecosystems.
The vendor further explained that its banking back-end solutions were lean because it can provide exactly the functional scope that someone would expect from a trade finance solution, and nothing beyond that. Certainly, this aligns — at least to some extent — with the goal of high functional coherence within the digital core. However, this is not enough to turn a traditionally architected back-end solution into a lean core.
Now, why is this the case? If a trade finance solution merely consisted of a lean core, then it couldn’t deliver all the necessary functionality by definition. With the lean core’s focus on data and providing pure processing capabilities, such a solution would lack all the workflows and richer business capabilities. Thus, a complete trade finance solution can consist of a digital core and a lean core. However, it can never just be a lean core.
Why is this so important? If a solution delivers exactly the business capabilities needed to support trade finance, then it may or may not be a great banking application. However, without architectural alignment, this solution won’t be able to ease transformation challenges in the way that the combination of a digital core and lean core can. And easing transformation challenges is what banks are looking for.
As always, let me know what you think.