Amanda Blackburn:
Hello and welcome to the iModernize podcast; Technology news, views and insights for businesses on the IBM i platform. I am your host Amanda Blackburn and I am the Director of Marketing at Profound Logic Software. Today I am joined by Rad Dockery, Senior Innovation Consultant at Profound Logic.
How are you holding up during the quarantine? You’re up in Canada, correct?
Rad Dockery:
Hello Amanda, thanks for having me on. I can’t complain. We are healthy and can keep paying our bills. Homeschooling was hard though, but other than that everything has been great. I am up in the Toronto area.
Amanda:
Nice. So, tell us a little more about your role at Profound Logic.
Rad:
I work with our sales team, and I work primarily in the financial services sector and supply chain. I spend most of my time with finance services, banking/insurance services and wealth management. I work with them as they look to modernize, innovate, and transform their business to reflect the new realities of the marketplace pre-COVID, and even more now post COVID world. I work primarily with institutions who use IBM in their IT environment.
Amanda:
That is an important sector to focus on, and definitely one that we hear from a lot in the IBM i community. You have recently written a blog post on the topic of digital transformation in the finance sector. Why do you think this is an important topic right now?
Rad:
I think the topic is more important now because access to cash and credit has become huge in COVID times. Whether that be for small or large businesses, or consumers. The ability to get access when you need it, how you need it. Immediately. When the shutdown happened globally, the first concern was ‘what about the families?’. How are families going to pay their bills and survive? How can we get money out to businesses so they can keep people employed?
The core of that is the banking system. Our banking system is built to adjust to these needs, but they were also worried. There was a great amount of concern, depending on the size of the bank, about capitalization and risk. Can I afford to give these loans out? Can I defer customers?
Banks being able to be mobile and flexible in this type of environment is critical. Even before COVID there were concerns about how consumers want to access their money and how they want to interact with their financial institutions. How do banks maintain all this innovation, and stay secure?
I remember once, at a cybersecurity conference, an expert asked ‘why do people want to hack banks?’ ‘Because that’s where the money is’. Right? The banking sector has to deal with how they have always run and how they can be more flexible. Whether it is a large or small bank, a lot of the challenges are the same.
Amanda:
You touched on a couple of great topics there. Getting access to finances from multiple devices and channels, omnichannel I believe it is called, and the impact of COVID on individuals and business. IBM i itself is very modern, but some of the applications that have been created on top of that platform may not be up to the modern standards that we might expect.
For financial business specifically on the IBM i platform, what do you think the biggest challenges are because of these legacy systems?
Rad:
It is a very big question. Let me give you a little history in the banking/financial sector. The banking system you think about today was really built in the 50s and 60s. That is when computers, and the IBM mainframe, became more mainstream for large companies.
Think about banking like an airport. An airport that was built in the 50s had a runway that could hold 3-4 planes. Modern airports can hold more planes now, but the baseline of these runways is the same. There is no airport in the world that wants to rip out all these runways. They will modernize those runways and put new technology, new pavement, on those runways. They will never tear them out. That is how the banking system was built. It was built before this whole idea of people sending money from their phones. No one saw this coming just a few years ago.
Amanda:
It blew a lot of us away that you could take a picture of your check and it would immediately deposit to your bank account!
Rad:
And there is a lot of people that still don’t get that. We never saw these things coming. A lot of mid-sized banks, or even large banks with separated departments, needed a server that hade the same security and liability of a mainframe, without investing into mainframe. This is how the system 3638 came about. When the AS400 came out it really grew because banks started buying packages with the servers that can handle all their needs with one scoop. It has worked fine, and they have upgraded a lot of the hardware infrastructure because the IBM power chips are supreme performance tools. The problem becomes that the applications were built before you could use your phone as a debit card at a store. The tools were not built for that, and that is the core problem. They have decades of business logic and data flow with IBM i that works great, but at the same time they have to compete with a new Fintech company coming around the corner who can catch their market share. How can they compete while keeping their costs down?
Amanda:
You mentioned Fintech, which is a market with tools and solutions to address legacy and modernization, but also all the latest like omnichannel and blockchain. Some businesses running on the IBM i might not be ready for that. What are all the options that you can think of for businesses that are facing this right now?
Rad:
The first options they all bring up is: Do I come off this platform? Especially if a new, senior executive comes on board who is not familiar with the platform at all and comes from the open systems world. They have no idea what RPG is. They do not know what it is, and they think they have to come off it. Then someone reminds them how long that takes, and how they have to move over thousands of processes to make that happen, all the while their competitors are taking their customers. Then that option gets pushed off.
The next option is: How do I create interfaces to build the experiences that my customers want? This is when a partner like Profound comes in because this is not a technology issue. The tech is the part we all look at, but it is also about where you are trying to go. One of the mistakes we often see is an institution wants to do more advance mobile solutions for clients, but they never talk to their IBM i team. They create some cool things, but their core banking/insurance/stock trading applications never modernizes because they never work together. No matter what you want to accomplish, you must get your teams on the same page. That is at the leadership level and starts with finding partners who are looking at you from a complete, holistic point of view. That is one advantage Profound Logic brings to the table.
Say you want to move away from green screens. Ok, great we can help with that. But what specific, business-focused goals are you really trying to accomplish? Who are the stakeholders, and how is that going to impact our profit and loss? How is it going to reduce our risk profile? How is it going to impact employee productivity? How do we put together a roadmap in a measurable, definable way? That is what is critical. Part of the problem, for a lot of our IBM i clients, is they don’t know these options exist. They are throwing tools at the problem, which is only a part of the solution. What is really part of the solution is having partners like Profound who understand the complete, holistic view of what you are trying to do. And understands the business requirements, the technical requirements, and often the most looked over thing: your cultural requirements. For a lot of organizations, if you have a team that has been programming in IBM i for a long time, now all the sudden your RPG programmer needs to know how to talk to a marketing director in English, and vice versa.
Amanda:
It is cultural, and we see this in almost every business that we work with.
Rad:
Especially for banking because it is known as one of the most conservative industries. When you picture a banker, you picture someone in a $900 suit, etc. In reality when you go down to the data centers these are people just like you and me. Insurance too.
One key thing in developing this idea of where you want to go is creating simple, definable goals. What could be a quick win that the team could rally around? What could be a quick project we could deliver on? If your goal is to deliver an array of new mobile services, what could be the first few initiatives we could run with? That is when you start to see what you can do with IBM i and Profound. Everyone wins together.
Amanda:
You mentioned the conservatism within the sector, and it makes sense. Security must be your top concern. You have to make sure you are safeguarding the data and making sure that your applications and systems live up to that. Making changes to those systems can be a very scary prospect, but you are also faced with this outdated-looking systems and aging code which is a major security risk as well.
Rad:
For sure. That is a very serious security risk. Often when CEO’s are talking on the news they are talking about risk profile. That is why IBM i has done so well in the market, they have security. What is key for any client to realize is that you can still innovate without doing massive customization. That is the benefit of working with organizations such as us who understand the holistic picture. If you want to modernize that green screen as a quick win, we can help you with that. But also realize we are not telling you to replace your source code and move off the IBM i. We are telling you to stay on it because it is secure. We can innovate out of a secure, robust, scalable environment that runs on IBM Power. That combination allows you to innovate quickly and makes you a powerhouse. Even more importantly, you want to be able to fail quickly. You want to be able to try new things faster. If you can say you are innovating quickly without having to bother your source code. Without having to hire a huge team.
One of the things we hear most often from the banking and insurance industries is ‘how much work do I need to do on my base code?’. We reduce that concern significantly by innovating within that secure environment. You can innovate and stay secure.
Amanda:
Well you just had a big win recently helping a business in the sector that was leveraging the IBM i platform for their applications. Can you tell us a little more about what the entailed?
Rad:
Absolutely. I will have to keep it a little vague because of privacy concerns. This was an overseas bank with a fairly large population who run their business on the IBM i. They had a few concerns. The first concern was 55-60% of their population were under 30 years old. It was critical for them to have more modern partners and services, but they could not innovate fast enough because they had to rely on vendors. They had to wait for 8-10 weeks for the vendor to even get back to them, and they were charged heavily for it. As you can imagine, this wasn’t making them very competitive and they were losing market share.
They wanted to create their own development garage internally for them to test things faster and make web services to make it easier for people to work with them. So we create a very robust proof of concept for them and we had to test Profound.js in their environment because of how large their customer base is. We were able to create web services that were able to execute 2000 transactions per second. Which was incredible. We were able to win the deal, and we just finished off our first set of web service developed for them.
The first ever fully-Node.js enabled web services this bank had ever seen on the IBM i. One of their developers actually used the tools to create a game super quickly to show his team what could be accomplished. He referenced this video where our CEO, Alex Roytman, used it to control his Tesla. For a team that was stuck in RPG for many years, now they are able to create games on the IBM i.
Amanda:
That is amazing. Often when we think about IBM i applications, 5250 applications, we see them as kind of outdated. At the same time, there are a lot of “modernization” tools that are themselves fairly outdated. One of the exciting things about tools like Profound.js is they are so new. They support development on IBM i. You can still use RPG if you want, but you can also integrate and convert to Node.js code. It is so awesome thinking about future development like you were talking about and connecting the businesses.
Rad:
Yes, exactly. Creating the game really showcases the culture component I was talking about. This takes off a little bit of the edge internally. He created something that was fun and cool, and everyone now sees something different from the IBM i code. It didn’t alter your RPG source code. It didn’t change your database table. We didn’t ask you to deconstruct the server. You created this game in 30 minutes, so what if you brought some fun and innovation to your core banking transactions?
In this country there are about 18 different ways to speak the language in business. They are now potentially able to use an AI bot, with the web services we built, to allow customers to complete transactions on Twitter. This got their marketing team invested in the development as well. If you are an executive or a shareholder this is what you want to see. This kind of cross-team innovation.
Amanda:
Absolutely. As someone who is in marketing, when you are able to break down those walls and have those communications across departments you can create some amazing things. As a consumer, I think about all the different stages of a transaction and I definitely want to see a company innovating at every stage.
Rad:
Your point is exactly right. There is an experience that we expect as a customer, and also as an internal employee. Customer service employees have been using the same system forever, and they have to ask the customer to hold because there are so many different screens they need to pull information from. They should be cross selling me additional products, but they have to go through so many different systems to just do the basic task. I am looking at this and I am saying if we worked with them, they could work off of one screen seamlessly.
If your employees are given tools to be more productive, they can give the customer a better experience. They could potentially lose good employees because the tools are so frustrating, and they could go to a Fintech company with less security. Without your employees you are nothing.
Amanda:
I 100% agree. We are coming up on the end of our time here. I have really learned a lot from you about the importance of having a more modern application capabilities within the financial sector. My last question for you is: If you could travel 20 years into the future(hopefully COVID-free), what would the ideal scenario be for the financial sector?
Rad:
Wow, big question. As an investor, I would want to see the banks become as efficient as possible in delivering services to customers. I am not talking about crazy things, just small victories that benefit the consumer as well as the business. Think about something like deals with gas stations. The customer saves pennies on the liter, the bank gets customers using their cards more, and the station gets more customers. Delivering value for everyone with automated processes. AI should be focused on creating value wins for everyone.
Equality within banking is my second thought. Access to financial services for everyone is becoming a huge deal. How do we make sure people are not left behind? How can we ensure the micro-business around the corner can get access to capital when they need it, without having to wait 3 hours on the phone? What can we do with the technology to get us there securely? If we could do that, then I think we could really change things for the better.
We can accomplish both with underlying security on a platform like IBM i, and a partner like Profound Logic who understand the business and social impact. If we have any other emergency like COVID again, we can be ready.
I will leave you with this: I have seen a joke on my social media everywhere. Who is your Chief Digital Transformation Officer? COVID-19. There has been a ton of bad to come out of this, but now is your chance to make a change.
You made a great point earlier. Looking at the companies you interact with, are they modernizing anything? Or are they just putting COVID in front of their normal offerings? It is about how to move forward. We can help customers deliver that transformation quickly and security.
Amanda:
COVID has challenged businesses in ways they have not been pushed before. Hopefully, businesses and people come out of this stronger.
Rad:
20 years ago, we never expected to be able to do what we can today, so think about what we could do in 20 years? We need to build the foundation for that today.
Amanda:
Thanks again for being on the podcast. I hope you and your family stays safe.
Rad:
Thanks Amanda, same to you and your family. Be safe.
Amanda:
For everyone out there listening, stay safe and stay healthy. If you are looking for ideas and solutions to modernize your business, make sure to subscribe to our blog at https://blog.profoundlogic.com/.
Until next time, this is Amanda Blackburn with the iModernize podcast, and we will talk to you soon.
In case you missed it, check out the first episode of the iModernize podcast, Innovation through Code Transformation.
