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Dubai Islamic Bank Pakistan is a retail and commercial bank specializing in financial products that adhere to Islamic principles (known as Sharia law). These principles aim to create a fair economic system by prohibiting the payment or acceptance of specific interest or fees for loans, and forbidding investment in businesses that provide goods or services considered contrary to Islamic principles.
Established in 2006 by Dubai Islamic Bank PJSC, the world’s first Islamic bank, Dubai Islamic Bank Pakistan has 70,000 customers, 67 branches across the country, and more than 750 staff. The bank’s rapid expansion meant it quickly outgrew its IT infrastructure.
Oracle Database 10g Release 2 and implemented Oracle Real Application Clusters to gain greater performance, availability, scalability, and stability. The result was a 60% to 80% improvement in processing times for financial and administrative transactions. The bank was also able to support the addition of 19 new branches in the space of eight months without any impact on system performance.
“The rock-solid stability offered by Oracle Database with Oracle Real Application Clusters give us peace of mind that our Oracle FLEXCUBE Core Banking system and loan application system is always available to support 24-hour banking operations,” said Touheed Abbas, manager, infrastructure, Dubai Islamic Bank Pakistan Ltd. “We have not experienced a single performance or management issue since we moved to a clustered database environment.”
Dubai Islamic Bank Pakistan provides financial products and services to retail customers, small and midsize enterprises, and large corporations. The bank launched Pakistan’s first Islamic Visa debit card and introduced Sharia-compliant products, such as savings accounts, term deposits, home loans, auto financing, and business finance. It also offers cash management, investment banking, and trade services. Customers can transact with the bank through branch offices, SMS, phone, and the internet.
The bank has experienced rapid success in the five years since its establishment, so much so that its infrastructure started to experience performance issues. Dubai Islamic Bank Pakistan has used Oracle Database 10g Release 1 to run its Oracle FLEXCUBE Core Banking, loan application, and human resources systems since its foundation. The increasing number of customers and users meant a growing number of financial transactions, such as customer deposits, ATM withdrawals, loan applications and repayments, purchase orders, and foreign currency trades. The bank also had to generate more daily business reports from its management information system, such as reports to uncover nonperforming loans (loans with overdue payments).
In April 2010, Dubai Islamic Bank Pakistan decided to upgrade to Oracle Database 10g Release 2 and implement Oracle RAC. “Running Oracle Database in a two-node Oracle RAC framework would enable us to benefit from more powerful performance, easy scalability, and higher availability, and ultimately support our rapidly expanding business,” said Abbas.
The clustered Oracle Database environment has delivered noticeable improvements in processing performance. According to Abbas, average transaction processing times have improved by up to 60%. “In some exceptional cases, we have reduced processing time by 80%, from 10 minutes to 2 minutes,” he said.
The improved processing speed is particularly important as Dubai Islamic Bank handles hundreds of thousands of financial transactions a day, from check deposits, to ATM withdrawals and business finance approvals.
“The faster we can process a transaction, the better it is for business,” said Abbas. “For example, we can now process a home loan application in significantly less time than previously, even with the increased portfolio size. Customers are happier because they receive their loan approvals sooner, and it enhances the bank’s customer service reputation.”
The improved processing performance extends to reporting time. Dubai Islamic Bank Pakistan runs numerous daily reports, including account statements and balance sheets. Abbas estimated that average reporting times have been reduced by 30% to 40%.
“Our users are delighted, because their queries are answered quickly and reports can be run faster,” he said. “It means they can work more effectively; for example, our loan managers can run nonperformance loan reports first thing in the morning and assign their staff to chase up the most critical outstanding loans right away.”
Implementing a two-node database cluster means that if one server in the cluster malfunctions, the transaction processing workload is instantly and automatically transferred to the second server. For Abbas and his infrastructure team, it means peace of mind that the bank can keep operating even in the event of a partial failure.
“Transferring all the processing work to a single server will result in a performance slowdown―but the bank can continue to do business, and that is the most important thing,” he said. “It would be catastrophic if we could not process financial transactions, queries, or reports.”
Abbas hastened to add that Dubai Islamic Bank Pakistan has experienced no issues since upgrading to Oracle Database. “The database cluster has been completely reliable and we have improved system uptime from 99.997% to 99.999%. I sleep better at night, knowing that the infrastructure is sound and will keep working no matter what.”
In the eight months after Dubai Islamic Bank Pakistan upgraded its Oracle Database, it opened 19 new branches, employed several more staff, increased its customer base significantly, and increased transaction numbers dramatically. The scalable Oracle technology ensured the bank could accommodate these increases with ease.
“In addition to the financial transaction load, we can have up to 750 employees accessing the system to run queries or reports,” said Abbas. “The Oracle platform supports all these operations with ease.”
In future, the bank will be able to accommodate business growth by simply adding a node to the cluster. “We won’t have to buy expensive new hardware if we want to introduce new retail and corporate Islamic banking products or open more branch offices,” said Abbas. “Likewise, any increases in customer, user, and transaction numbers can be easily met with the Oracle platform.”
Oracle Database technology was attractive because it integrated seamlessly with Dubai Islamic Bank Pakistan’s Oracle FLEXCUBE Core Banking application, as well as its loan application and human resources systems.
It was particularly important that the database upgrade was completed without disrupting day-to-day business, as the Oracle FLEXCUBE Core Banking system is central to the bank’s activities. In place since 2006, the system manages every aspect of the bank’s operations, from processing online transactions to deposits made at branches, to recording ATM withdrawals and ensuring compliance with Pakistani banking regulations within the sphere of Sharia principles.
“By choosing Oracle, we were assured of easy integration with the Oracle FLEXCUBE Core Banking system, as both products are from the same vendor,” said Abbas. “This simplified the upgrade and gave the bank a certain level of comfort that there would be few issues migrating its core banking application to the upgraded database.”
Similarly, Oracle Database’s open interfaces ensured it could be easily integrated with third-party loan application and human resources systems, to minimize the impact of the upgrade on these two critical applications.
As a 24-hour financial institution, it was critical for Dubai Islamic Bank Pakistan to have a rock-solid database infrastructure. The bank has used Oracle Database since 2006 and was impressed with the software’s performance, stability, and reliability, and saw no reason to change vendors. To ensure scalability for its growing business, the bank decided to implement Oracle RAC as part of the database upgrade.
“Implementing a clustered Oracle Database infrastructure would ensure high availability and scalability, both of which are important for our 24-hour operations and growing business,” said Abbas. “A two-node clustered database environment enables instant failover from one server to another, so we can continue to process transactions, albeit at a reduced capacity.”
Oracle’s open architecture was another attraction. “The open standards make it easy for us to interface the Oracle Database platform with third-party products, such as our loan application and human resources systems,” said Abbas.
As one of the world’s leading database vendors, Oracle is widely known, so finding people who are trained in maintaining Oracle Database is relatively easy. “This is important as we want to be sure we can employ people who are trained in maintaining Oracle Database systems; there is no point in implementing a database that cannot be easily supported,” said Abbas.
Finally, Abbas praised the service provided by Oracle. “I am extremely satisfied with the support I receive from Oracle,” he said. “On the rare occasions that I’ve need help, Oracle has been very prompt and helpful. The Oracle experts are available at any time.”
Dubai Islamic Bank Pakistan engaged Oracle Partner Infotech Pvt Ltd to manage the upgrade to Oracle Database. The two organizations implemented the database on a single server to test the functionality of Oracle FLEXCUBE Core Banking on the new platform before developing the clustered database framework. The bank also called on Oracle Consulting for advice on its database architecture and other database lifecycle questions.
The bank migrated to the clustered database platform in October 2010. “The migration took around six hours over a weekend, and went very smoothly as we had done a number of trials prior to the actual cutover,” said Abbas. “We timed the migration to coincide with the Eid holiday period in Pakistan in case we had any issues, but there was nothing to worry about.”
Dubai Islamic Bank purchased Oracle Business Intelligence Enterprise Edition in May 2011 and will implement the software on Oracle Database in the near future.