Founded in 1991, Absa Group Limited is one of South Africa’s largest financial services institutions and a subsidiary of Barclays Bank PLC. It maintains an ATM network, issues debit and credit cards and switches POS transactions, and has been a BASE24® customer since 1995. Last year, the bank embarked on the migration from its existing BASE24 system to ACI’s next generation BASE24-eps® payments engine. This is an overview of why Absa made the decision to migrate and the business benefits it has achieved as a result.
The business case to migrate
First implemented in 1995, Absa’s BASE24 system has grown to process transactions from more than 63,000 POS devices and 8,000 ATMs. In 2008 alone, the system processed more than 836 million transactions for Absa. BASE24 had served the bank well over a 14-year period, but Absa realized that it needed a more modern IT architecture in order to respond more efficiently to changing market conditions and increasing customer demands. On learning that a newer architectural version of ACI’s payments engine was available, Absa embarked on a project to migrate to ACI’s BASE24-eps version 07.4 (currently on version 09.2) as part of its commitment to be responsive and deliver flexibility and agility to its customers.
BASE24-eps is a natural stepping stone from BASE24 as it builds on the availability, scalability and reliability of BASE24. It provides added agility using open systems technology to deliver an enterprise service for all retail banking payments. Since it is a multiplatform solution, it can acquire transactions across many different channels, manage electronic payment devices and perform high-volume switching, routing and authorization services.
In addition to these drivers, the business case for migration was that BASE24-eps would help Absa roll out new payment channels and products more quickly and effectively. As a card issuer, Absa also wanted to be able to process transactions from any end user access point, including internet shopping networks, POS devices, mobile telephones, home banking systems, bank branches and ATMs.
Migration decided – but what does it involve?
Absa recognized that it needed to invest in new skills training for its project staff. Once trained, the team was able to learn the languages and structure of the new software comparatively quickly and therefore carried out the migration project with relative ease.
The whole process was undertaken in three main phases. The first phase was the population of data sources for the issuing activity. The issuing phase took approximately 12 months, of which nine months were spent in planning and implementation. The second phase of the BASE24-eps implementation involved setting up the communications to the back-end host provided by IBM®. The bank used the standard ISO 8583 framework to develop a custom communications link.
The final phase of the process was an intensive three month course of user acceptance testing. Throughout the implementation of BASE24-eps, the operational risks of migration were minimized by running BASE24 in parallel to support the transition and ensure a rollback position. Absa also minimized its implementation risk by getting the ‘plumbing’ in place first – installing the core system, SIS and foundation layer on the same hardware platform. In October 2008, the bank then populated the (custom) data sources by uploading its 10-million-card database (balance and card files). Initially it ran simulated transactions through the development system. A month later, the bank added two small Bank Identification Number sets (BINs), with the intention of seeing how BASE24-eps would behave. As soon as it was satisfied with this, the bank then started gradually adding BINs to the production system to monitor the effect on the overall performance. By January 2009, the team had added sufficient BINs to enable processing of 40 per cent of its issuing volumes, which is some 650,000 transactions per day. In February 2010, the issuer migration was complete, processing some 1.4 million transactions per day.
As part of the migration effort, Absa was able to size the usages appropriately and define the scripts they needed to perform authorization. To date, the bank has not experienced any unplanned outages. The flexibility of the scripting engine has already been demonstrated in this project – the bank got the benefits out of scripting that it wanted by removing any redundant and unused code and keeping the scripts to a bare minimum. This meant that there were less tedious internal processes, resulting in easier implementation of critical business requirements.
During the implementation, Absa also conducted a Customer Specific Modification (CSM) review. The bank had built up around 260 CSMs impacting authorization over 14 years of operation with the BASE24 system. After forming a small review team from the ATM and POS user community, Absa analyzed all the authorization- related CSMs and assessed whether all of these modifications were needed. As a result of this exercise, Absa has managed to significantly reduce the number of CSMs from 260 down to 40-50, which has further streamlined operations.
Business benefits achieved
By February 2010, Absa had successfully migrated issuer processing of its card base onto BASE24-eps with no detrimental influence on performance. The bank plans to roll out acquirer functionality
in a later phase. In implementing BASE24-eps, there has been little need for customization due to the use of the flexible
BASE24-eps scripting engine, which has made it easier for Absa to manage the product on a daily basis and has saved the bank time and money. Furthermore, the number of modifications required has also declined significantly, making the system easier to manage and maintain.
The fact that BASE24-eps uses C++ and Java™ languages and has scripting capabilities also means that it is easier for Absa to recruit the required skill set and perform any customization of the product more easily than with BASE24.
In terms of learnings to take from the project, Absa realized that it needed to allow more time up front for planning. The bank would also have benefited from ensuring that it had the necessary skills in house before it embarked on the project. Absa would recommend doing any training that is required at the beginning of such a project.Download full details