Depth ｜ Iteration for ＂Heart＂, a ＂self-redemption＂ of China Rural Commercial Bank

In recent two years, affected by the epidemic situation, the rigid requirements such as non-contact remote online service and diversified introduction of corporate financing tools have greatly challenged the agile innovation ability of the core system of rural commercial banks. In the new competitive situation and exhibition environment, the shortcomings of these old core systems are constantly exposed-business processing performance, rapid product launch, customer differentiated pricing, high concurrent business processing, multi-legal person support and many other aspects, which are particularly difficult.

When technology limits the pace of business, iteration for "heart" becomes imminent.

However, this is not easy. We must know that the core systems of most rural commercial banks are not even independent, and they have long relied on the unified development, construction and maintenance of provincial associations. In addition, congenital conditions doomed many rural commercial banks to have weak IT personnel reserves.

How to deploy the database? How to design the system architecture? How to upgrade the front counter system? How to connect the central office and business system in the intra-bank business? ….. Problems come one after another. Upgrading or rebuilding a new core system is a "peeling off" thing for many rural commercial banks.

China, a reporter from Securities Times and Brokers, deeply investigated the iterative experience of several core systems of rural commercial banks, trying to completely restore an unknown but extremely important self-salvation of rural commercial banks. Only by understanding these experiences can we understand how the grand narrative of "digital transformation" falls on individual rural commercial banks.

Searching for the keyword "core system of rural commercial banks" on Baidu, you will find that many rural commercial banks in different regions and sizes have done the same thing in recent years-put into production a new generation of core systems. Why? To put it bluntly, technology can’t keep up with business.

A member of the Ministry of Science and Technology of a listed rural commercial bank specifically pointed out the technical bottlenecks of many old core systems from a technical point of view. "There are still many inconveniences. For example, our real-time transaction processing, accounting function and general ledger module are coupled together, which leads to the on-line processing performance of the system will decline once the system fails; At the end of each month, there will be congestion in centralized batch running, and some reports and data can only be provided in a delayed manner; It is difficult to deal with high concurrency, such as batch withholding; The separation of reading and writing is not supported, and there is no complete data cleaning and backup mechanism; There is no unified hot account processing mechanism, and a large business volume will lead to a background lock table. " The scientific and technical personnel listed many problems.

Based on interviews with other professionals in the science and technology information department and operation department of rural commercial banks, China, a reporter from Securities Times and Brokers, summed up the common problems existing in several old core systems:

All of the above are related to the fact that the previous generation core system did not adopt an open architecture. From the beginning, these systems did not support distributed architecture, which made resources only deployed on small computers, and could not be deployed in clusters, with high hardware and software costs and poor system scalability.

"Do you know how long it will take to upgrade the core system?"A person from the Science and Technology Management Department of a rural commercial bank who has completely experienced the upgrade of the core system asked China, a reporter from Securities Times and Brokers, in an interview. The rural commercial bank where it is located completed the transformation of the core system at the end of 2020. According to its memory, the first core system is to solve the aging problem of the previous generation of machines and choose higher performance machines and storage; The second is to upgrade the core database and change the single-machine mode to the dual-machine high availability mode; Third, the core system application was upgraded from the original stand-alone mode to the three-server application load balancing mode.

The answer is 12 months, and this is just an ordinary, non-exchange blood upgrade. This person told the Securities Times China reporter that one year has passed since a whole set of work, including investigation, bidding, demand, development, testing, training, drills, backup and migration.

But it’s pretty fast. Because strictly speaking, the above upgrade does not involve a comprehensive transformation of the core system. If we want to apply all the "distributed databases" that we are familiar with now to the core business systems, the scope of reconstruction will be even larger.

Changshu Bank has just completed such a "heart-changing" transformation-swITching its core system to domestic native distributed database, named "Hexin" 4.0 project, and defined it as "a key measure to transform and reshape the IT support system of the whole bank".

From the preliminary demonstration to the project landing, "Hexin" 4.0 has gone through the process of project group implementation plan planning, bidding and procurement, overall design, development and joint debugging, data migration, testing and acceptance, production drill and online release, which lasted for 18 months from September 2020.

"It’s not easy. We conducted 37 interviews in the early stage and combed 306 feedbacks. Because the functional departments of the head office, microfinance lines, and subordinate village banks all have needs, we must find out. There are as many as 181 suggestions for optimization, new requirements and pain points. After a thorough investigation, we will begin to analyze and review the requirements. We also invited professionals such as Alibaba Cloud, Jiangsu Runhe and Xingyao Blueprint to participate in the technical demonstration support. " Insiders of Changshu Bank told China, a securities times broker.

According to its summary, the complexity of system reengineering is reflected in three aspects:

"It is not easy for our bank to make up its mind to be a new core. The road to the construction of this project is tortuous, and we have encountered a lot of problems and difficulties on the way." An executive of Changshu Bank said bluntly. He said that first of all, if the new core wants to realize flexible combination and reuse of micro-service functional modules, it needs to clarify the logic between the 200 sets of system functions and business processes of the whole bank. Secondly, it is still very difficult to adapt to the core of the business, how to draw boundaries and build a scientific framework. Thirdly, there are too many technical keywords involved in the new core project, such as distributed, micro-service, domestic database, dual-database mutual cutting, data sub-database, national secret algorithm, etc., which is a huge challenge for any bank without precedent.

Despite the difficulties, Changshu Bank became the first bank in China to carry a domestic distributed database on the distributed core accounting system. At present, the representative performance indicators show that the throughput of Changshu Bank’s core system has been greatly improved, and the business processing capacity has been improved from 120TPS to the limit performance of 5500TPS；; The concurrency capability has been greatly improved, and the concurrency capability of the core system has been improved from 60 to 2500. The online batch processing capability is improved, so the old core can’t handle more than 50 batch businesses in one batch, and the new core supports more than 100,000 batch businesses in a single batch; The batch processing time at the end of the day is greatly shortened.

In exchange for "heart", a rural commercial bank has initially succeeded in tackling the problem.

What functions should a good core system have?

From the investigation of the core system construction of several rural commercial banks by China reporter of Securities Times, it is found that there are the following commonalities: on the one hand, the upgrading of the core system needs to meet the unique operation and differentiated development of rural commercial banks; On the other hand, the operating environment of the core system is more simplified, agile, flexible and more secure, which is also the objective technical demand of the current rural commercial banks. Generally speaking, the upgrading of the core system should be improved in three major areas: actual business, management efficiency and technical level.

Specifically, first, in terms of business process optimization, such as optimizing the open account process, it can realize the one-time verification of the same customer’s business and improve the efficiency of business processing. Second, in terms of differentiated pricing, it can carry out "one price per household" for different customer levels and account levels, and also realize the scene charging function, record rich charging information, and enrich the preferential reduction dimension. Third, in terms of rapid product innovation, we should have flexible allocation of key elements of existing products, strengthen unified product management, and realize business functions such as integrated deposit and loan card, corporate overdraft business and group cash management. The fourth is to realize the integration of local and foreign currencies in business processes and the unified management of local and foreign currency positions.

From the analysis, it includes realizing the unified management of customer information of the whole bank, realizing the linkage synchronization of customer information across systems, and standardizing the management and inspection mechanism of special lists. In the aspect of multi-legal person support, it supports the differentiated management mode of multi-legal person business of parent bank and rural bank subsidiaries, realizes multi-level institutional management, and realizes one-click processing of institutional adjustment. In the aspect of account management, on the one hand, it can make the account system more flexible, such as supporting multi-layer structure, combination of reality and reality, multi-dimensional account system, and realizing group cash, finance, free trade zone and other accounts; On the other hand, it can also make accounting more flexible, such as realizing flexible interest settlement and various repayment methods for loan business, supporting flexible allocation of interest settlement and rules for internal households, and improving reconciliation mechanisms within and between systems.

First of all, the core system of rural commercial bank realizes the application of the core system and the distributed deployment of the database at the application level by introducing the distributed framework, so as to adapt to the growth, differentiation and diversification of banking business. Secondly, ensure the accuracy of the system, support the continuity and stability of the business, run efficiently and be available for a long time, and enable scientific and technical personnel to operate and operate independently, and also meet safety standards to ensure safety and controllability. Finally, the core system should realize refined data support, improve the data quality of regulatory statements and improve the accuracy of data submission. At the same time, in terms of data governance, we will improve the standardized governance of business data of the whole bank, laying a foundation for meeting the requirements of precision marketing, management analysis and regulatory compliance.

Editor: Wang Lulu