New regulations: Is your mainframe ready to test?




The global financial crisis has brought with it a wave of regulations that financial institutions must address. These regulations require organisations to demonstrate robust internal governance and reporting mechanisms in an increasingly fluid and fast paced environment, making IT more expensive and more complicated.

While the regulations themselves may be simple enough to comprehend, the technical requirements for their implementation in IT are far from it. All mainframes are optimised for scalable, resilient  production performance and provide the horsepower to keep financial enterprises running. However, even in static core systems, MIPS demands slowly accrue over time due to routine changes, and increasing levels of regulation will only serve to further stretch the capacity, resilience and efficiency of an organisation’s mainframe environment.

Most organisations recognise the important role that technology plays to handle the growing demands of regulators. For financial institutions, the natural home for their critical and pervasive applications is the mainframe. However, with new regulations coming in so fast many organisations are not sure of the best strategy to adopt. FATCA- the US Foreign Account and Tax Compliance Act, which forces foreign entities to disclose all US clients and effectively collect tax on behalf of the IRS, is one example.  Financial institutions will be required to extract data from their core systems, products and service providers and package the data in a form required by the IRS. This will require an overhaul of key systems. Moreover, the likelihood is that other countries will also follow suit with similar regulations. Continual changes and modifications to regulations are also making the process more arduous. Over-burdened IT environments, already working at near-full capacity could significantly impact the IT processes used to prepare for these changes – drastically slowing the whole process down and potentially costing large amounts of money.

Additionally, the larger the organisation, the higher the potential cost of modernising or responding to regulatory change. Large organisations need to find ways of managing potentially spiralling costs brought about from increases in mainframe capacity. One option is to take all the mainframe operating cost out by doing away with the mainframe completely .While many IT managers find the prospect of moving the whole mainframe environment over to another system daunting, it does not need to be an all-or-nothing situation. So a second option is to move major testing activities from the mainframe on to lower cost commodity hardware, which behaves exactly the same way as the mainframe but offers increased testing capacity. By doing this, businesses can cope with the testing needs brought about by regulatory changes at a lower cost while also meeting business-critical timeframes. With this process, bottlenecks in the testing cycle will be eliminated and testing and delivery schedules will be able to be set without the limitations of mainframe capacity.

Overall, moving even just elements of core workload away from the mainframe such as the testing cycle can provide the capacity to make businesses more agile, and in a better position to cope with current regulation requirements, as well as those yet to come.

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