The State of Central Bank Digital Currency

The State of Central Bank Digital Currency

Innovations in digital currencies could redefine the concept of money and transform payments and banking systems.




    The State of Central Bank Digital Currency

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    Central banking institutions have emerged as key players in the world of banking and money. They play a pivotal role in shaping economic and monetary policies, maintaining financial system stability, and overseeing currency issuance. A manifestation of the evolving interplay between central banks, money, and the forces that shape financial systems is the advent of Central Bank Digital Currency (CBDC). Many drivers have led central banks to explore CBDC: declining cash payments, the rise of digital payments and alternative currencies, and disruptive forces in the form of fin-tech innovations that continually reshape the payment landscape.

    Central banks are receptive towards recent technological advances and well-suited to the digital currency experiment, leveraging their inherent role of upholding the well-being of the monetary framework to innovate and facilitate a trustworthy and efficient monetary system.

    In 2023, 130 countries, representing 98% of global GDP, are known to be exploring a CBDC solution. Sixty-four of them are in an advanced phase of exploration (development, pilot, or launch), focused on lower costs for consumers and merchants, offline payments, robust security, and a higher level of privacy and transparency. Over 70% of the countries are evaluating digital ledger technology (DLT)-based solutions.  

    While still at a very nascent stage in terms of overall adoption for CBDC, the future of currency promises to be increasingly digital, supported by various innovations and maturation. CBDC has the potential to bring about a paradigm shift, particularly in the financial industry, redefining the way in which money, as we know it, exchanges hands.

    Read our perspective paper to learn more about CBDCs – the rationale for their existence, the factors driving their implementation, potential ramifications for the financial landscape, and challenges associated with their adoption.

    Download Perspective Paper




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      Quality engineering for Blockchain-DLT platform

      Quality engineering for Blockchain-DLT platform

      Banking & Financial Services

      Next-gen Quality Engineering for Blockchain-DLT platform

      Quality engineering implementation helps a digital financial services client smooth the legacy migration of its Blockchain-DLT (Digital Ledger Technology) platform by advancing automation coverage and patch delivery efficiencies.

      Client

      A leading digital financial services company

      Goal

      Blockchain- DLT platform assurance with improved automation coverage

      Tools and technologies

      Amazon Elastic Kubernetes Service (EKS), Azure Kubernetes Services (AKS), Docker, Terraform, Helm Charts, Microservices, Kotlin, Xray

      BUSINESS CHALLENGE

      The client's legacy DLT platform did not support cloud capabilities with the Blockchain-DLT tech stack. The non-GUI (Graphic User Interface) and CLI (Command Line Interface)-based platform lacked the microservices architecture and cluster resilience. The REST (Representational State Transfer) APIs-based platform did not support platform assurance validation at the backend. Automation coverage for legacy and newer versions of the products was very low. Support for delivery patches was insufficient, impacting the delivery of multiple versions of R3 products each month.

      SOLUTION

      Iris developed multiple CorDapps to support automation around DLT-platform functionalities and enhanced the CLI-based & cluster utilities in the existing R3 automation framework. The team implemented the test case management tool Xray to improve test automation coverage for legacy and newer versions of the Corda platform, enabling smooth and frequent patch deliveries every month. The quality engineering process was streamlined for the team's Kanban board by modifying the workflows. Iris also introduced the ability to execute a testing suite that could run on a daily or as-needed basis for AKS, EKS, and Local MAC/ Windows/ Linux cluster environments.

      OUTCOMES

      The Blockchain-DLT reliability assurance solution enabled the client to attain:

      • Improved automation coverage of the DLT platform with 900 test cases with a pass rate of 96% in daily runs
      • Compatibility across AWS-EKS, Azure-AKS, Mac, Windows, Linux, and local clusters
      • Increased efficiency in deliverables with an annual $35K savings in the test case management area

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      Test Automation Speeds Model Risk Management System

      Test Automation Speeds Model Risk Management System

      Banking

      Test Automation Speeds Model Risk Management System

      Automated testing for a top international bank's model risk management system brings efficiency and reliability.

      Client

      Top international bank

      Goal

      Fully automate the model risk management system framework to improve quality and confidence in testing results

      Tools and technologies

      Java, Selenium, Maven, TestNG, Git

      BUSINESS CHALLENGE

      The client's existing model risk framework was inefficiently handling functional testing aspects and risk scenarios due to lack of an end-to-end testing framework. Built on redundant, hard-to-debug, and non-scalable code, the system was unreliable for model risk testing. Test cases and controls were maintained and executed in Excel, eliminating parallel workflow abilities, tempering testing results, contributing to increased testing efforts and even delaying production launches in some cases. Scalability of testing using automation, running data-driven, end-to-end test flows, and restoring confidence in test results were the client's prime challenges.

      SOLUTION

      Iris built a lightweight and scalable new framework, providing 100% automated regression testing of functional test cases. Using simplified, customizable code that separated automation utilities and test functions, Iris' solution brought multiple improvements. Among them was faster test execution due to significantly reduced manual efforts. It also resulted in better quality and stability from the early identification of testing issues, enabling immediate corrective actions to occur. Another advantage of the solution was adaptability to multiple application areas due to ease of maintainability and traceability of code employed.

      OUTCOMES

      The client experienced several positive effects from the new, fully-automated solution:

      • Acquired a 100% stable, scalable, reusable test framework
      • ROI of 72%; payback period of less than 8 months
      • 20% reduction in testing efforts for faster time to market
      • Significant decrease in time required for ongoing maintenance of test scripts

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      Tech stack automation expedites script development by 3x

      Tech stack automation expedites script development by 3x

      Manufacturing

      Tech stack automation expedites script development by 3x

      Manual processes across the multi-technology stack were severely affecting the script development cycles in terms of time, effort and cost. Iris application agnostic Test Automation framework and DevOps integration helped the client reduce the script development time and cost significantly.

      Client

      A leading building supplies manufacturing company

      Goal

      To support 30+ applications stack for UI, E2E, APIs, performance, mobile automation along with DevOps pipeline integration

      Tools and technologies

      .NET Core, PeopleSoft, Salesforce, WMS, JavaScript, Angular, Foxpro, C#, Selenium, SpecFlow, RestSharp, Nunit, Mobile Center/Emulators, Allure, Jira, Azure Pipeline, GitHub

      BUSINESS CHALLENGE

      The client had technology stacks comprising of diverse technologies that were difficult to manage. Substantial manual effort and time were spent on integrating the checkpoints, elongating the development process. Validating end-to-end business flows across different applications was the prime challenge. Reporting processes were also scattered across the entire application stack, making it vulnerable.

      SOLUTION

      Iris developed a robust application agnostic Test Automation framework to support the client’s multiple-technology stacks. Following the Behavior-driven Development (BDD) approach to align the acceptance criteria with the stakeholders, we built business and application layers of the common utilities in the core framework. Our experts identified E2E business flows to validate the downstream impact of the change and automated the entire stack through the shift-left approach. Azure DevOps integration enabled a common dashboard for reporting. The client attained complete version control to track production health and enforce strong validations.

      OUTCOMES

      Iris Automation solution enabled the client to surpass several business goals. The key outcomes of the delivered solution included:

      • ~65% Increase in automation coverage
      • 100+ Pipelines for in-scope applications across multiple environments
      • 3700+ Test Automation scripts execution per sprint cycle achieved across applications
      • 3X Faster script development of behavior-driven test cases 
      • Multi-day manual test effort reduced to a few hours of automated regression 
      • 70% Reduction in effort

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      IT modernization boosts Insurance customer base

      IT modernization boosts Insurance customer base

      Insurance

      IT modernization boosts Insurance customer base

      Existing applications and business systems of a Fortune 500 Insurance Carrier were inadequate to meet customer expectations. Iris business systems transformation solution enabled the client to deliver a consistent customer experience, improving acquisition and retention significantly.

      Client

      A leading American Fortune 500 Insurance Services Provider, offering insurance, investment management and other financial products and services across the Americas and 40 other countries

      Business Drivers

      To advance business agility and customer experience through modernized business systems

      Technologies and Frameworks

      C#/.NET, JAVA, DevOps, Python, NodeJS, App Services, Managed Application Support

      BUSINESS CHALLENGE

      The client’s existing business applications, systems, and support services were in stasis and not delivering the much-needed value to the insurer and end customers. Due to the lack of enterprise application portfolio strategy, business functions were onboarding applications in a silo. The net impact was that the insurer’s revenue and market share decreased. Longer turnaround times and outdated UI were discouraging customers. On the other hand, prospective customers were also opting for modernized options available in the market.

      SOLUTION

      Iris delivered app development and managed services across Annuities, Life Insurance, Group Insurance, Retirements and the Global Enterprise Service groups that decide the platform for all business units. Our services spanned around Enterprise Collaboration portal, Financial Wellness platform, Mutual Fund platform modernization, Oracle EBS development and support, and Retirement Annuities platform management. We also executed a scaled Agile program and ran multiple Scrums within the enterprise development and support landscape. Iris tech experts established DevOps and scaled Agile Framework within the client organization and enabled a team of over 150 professionals globally to support business operations 24X7.

      OUTCOMES

      Iris has been working around the application portfolio for over three years. We have helped the client deliver an exceptional experience to employees and end customers through active service support. Key outcomes of the delivered solution included:
      • Infrastructure availability increased to 99%
      • Optimized maintainability reduced the KYC process time by 75% 
      • Customer response time cut down by around 40% 
      • Promoter score incremented from 5 to 9 out of 10 
      • Customer retention improved by nearly 80% 
      • Customer acquisition increased by 65%

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      Cloud transformation increases business agility

      Cloud transformation increases business agility

      Standards & Membership

      Global Standards organization increases business agility

      Existing applications supporting the business were built on monolith architecture with high technical debt. Iris transformed over 15 years old monolith applications into microservices with automated integration and cloud deployment to deliver faster MVPs.

      Client

      A non-profit global organization responsible for developing and maintaining standards, including barcodes with over 115 local member organizations and over 2 million user companies

      Business Drivers

      To deliver MVPs in shorter cycles, reduce Mean Time for Ticket Resolution (MTTR), and lower the total cost of ownership

      Tools and technologies

      C#/.NET Core, Python/DJango, NodeJS/Express, Azure WAF, Azure APIM, App Services, Azure Kubernetes Service, Azure Monitor, Application Insights

      Global Standards Business Challenge

      BUSINESS CHALLENGE

      The client had a suite of legacy applications to generate barcodes that are scanned globally over 6 million times a day. These applications were built on monolithic architectures using heavy-weight application servers and outdated technologies. This architecture was causing long development cycles, making the organization less competitive. Developers’ productivity was also dropping due to high technical debt.
      Global Standards Cloud Solution

      SOLUTION

      Azure cloud offered some of the foundational features like container orchestration, app engine, integration, API gateway, monitoring and others, making cloud-specific modernization a natural choice.

      Modernization strategy involved reverse engineering of on-premise applications, domain-specific grouping the product backlogs by, adopting domain-driven design, and using open source cloud-friendly software with CI/CD pipeline. We transformed the applications to a .NET core framework using cloud-native design principles on Azure cloud. The solution was developed using Azure App Services, front door and service bus following the agile development approach with two-week sprints.

      Global Standards Cloud Outcomes

      OUTCOMES

      Iris helped the client realize multiple business benefits, including higher agility, resiliency and cost-efficient IT operations. Key outcomes of this cloud modernization engagement are:

      • Reduction in Mean Time for Ticket Resolution (MTTR) by 30%
      • Increase in application and infrastructure uptime to 99.9%
      • Real-time visibility of application and infra metrics
      • Enabled bi-weekly MVP delivery

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      Pandemic pivot from physical to online tests

      Pandemic pivot from physical to online tests

      Education

      Pandemic pivot from physical to online tests

      System modernization helped a multinational educational testing and assessment organization overcome COVID-19 disruptions to deliver seamless and accurate digital testing.

      Client

      A leading U.S.-based educational testing and assessment services company

      Goal

      Switch from in-person to online testing

      Tools and technologies

      AWS Serverless, Dynamo DB, Node.js, Typescript, Java, Jenkins, and Angular

      BUSINESS CHALLENGE

      Our client, which provides educational testing and assessment services, faced an existential threat with the pandemic-era lockdowns and social distancing
      requirements. The testing centers it operated at physical locations were unable to open, leaving thousands of students worldwide in a state of uncertainty. 
      Our client had to switch from in-person testing centers to a digital-first or online
      testing solution almost overnight. To achieve that, it had to migrate rapidly from legacy systems to the cloud. It also needed to ensure the sanctity and accuracy of its tests while delivering a seamless digital experience to its customers. Other challenges included the ability to dynamically scale up or scale down capacity in response to demand, maintain acceptable service levels, and enable thousands of
      expert test raters’ to access and evaluate tests.

      SOLUTION

      Iris Software stepped in to facilitate a strategic digital pivot in the business model to secure the company’s future. Modernization efforts that were underway at the company even before the pandemic were accelerated as a digital upgrade became imperative. We shifted the data stored on legacy infrastructure was to the cloud. Our team developed a new testing interface that would work overnight across devices, geographies, and different internet connections. Switching the testing operations to the cloud with scalable capacity could help manage the surge in the number of users for the tests Iris also deployed automation and AI tools to deliver superior experiences for test raters. Those who faced challenges while attempting to grade tests were provided with an always-on AI-based solution to automate the troubleshooting and ticketing process.

      OUTCOMES

      The client now has scalable, digital-first testing capabilities to meet all its testing requirements.

      • Cloud-based testing ensures that students, evaluators, and employees have access on-demand.
      • The remote testing options are accurate, secure and safe from external threats.
      • A strong focus on automation and user experience has allowed for optimized online offerings.
      • Surges in demand for tests can be met rapidly and at scale with minimal intervention.
      • Thanks to the always-on cloud offerings, service levels are easily maintained.
      • The successful digital pivot has led to strong interest in a hybrid operating model to safeguard the business from threats in the future.

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      The power of in-sprint automation

      The power of in-sprint automation

      Automation

      The power of in-sprint automation

      A large securities firm sped up time-to-market with end-to-end test automation on the cloud.

      Client

      A leading securities trading firm.

      Goal

      Build a cloud-based automation framework to test client’s trading platform.

      Tools and technologies

      C#, Ranorex, TestRail, Simulators and Selenium.

      BUSINESS CHALLENGE

      The client had a legacy trading platform that had grown and evolved over time. The platform consisted of a stack of 33 applications, built on a variety of technologies and architectures. Testing new features and additions was proving to be a big challenge. A simple change in one feature would warrant a verification of the complete application. To ensure that any change does not affect other functionality, the client needed to do extensive regression testing and verification. This was a cumbersome process with over 20,000 or 30,000 test cases being checked and executed manually. The trading firm had to deploy over 20 people to carry out this exercise. The client had tried to automate the testing process with a variety of tools but was not able to get the efficiencies it wanted. In addition, the client had multiple squads working on different apps, functionality and features. Each squad used its own automation suite. It was becoming a challenge to co-ordinate the work of the different squads and ensure that changes made by a squad did not impact the overall functionality of the platform. Iris’s brief was to design and deploy a common cloud-based test automation framework for the client’s trading platform to ensure that it could launch new features faster.

      SOLUTION

      Using its cloud-based ready-to-deploy test automation framework, Iris sped up the deployment of new features for the client’s trading platform. The cloud solution, based on Amazon Web Services (AWS), featured continuous testing of multiple products on a common framework layer. It allowed for complete capacity planning of spinned cloud instances and need-based shutdowns. Iris executed the project using acceptance test driven development (ATDD), a methodology that involves collaboration between customers, business teams and development teams. The teams jointly created the user stories and put down the acceptance criteria for any feature or functionality. Then tests were designed within the common framework to check if the feature met the acceptance criteria. What was unique about the approach? Typically, automation is introduced towards the end of a development cycle. You would find that, in most projects, developers bring in automation in Sprint 4 for features developed in Sprint 1, 2 and 3. As a result, return on investment isn’t maximized. Our team introduced ‘in-sprint’ automation, enabling 90% test automation with every sprint. This resulted in more efficient and faster testing, and cost savings for the client.

      OUTCOMES

      The client’s deployment speed improved significantly with 90% faster execution in each sprint cycle and 80% faster script development. The cloud-based solution is 100% configurable for on-demand execution on AWS, which reduced the client’s cloud infrastructure costs by 70%. The new ability for complete capacity planning through the use of infrastructure-as-code (IaC) for spinning up cloud instances helped the client achieve end-to-end (E2E) automation of regression/ functional test cases.

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      Technology transformation for capital markets reduces infrastructure costs and improves turnaround time and deal compliance.

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      Deliver personalization via report automation

      Deliver personalization via report automation

      Asset Management

      Deliver personalization via report automation

      A leading asset management firm personalized offerings by automating processes to glean customer insights.

      Client

      A leading asset management firm based in the U.S.

      Goal

      Help asset managers deliver personalized solutions to establish differentiation.

      Tools and technologies

      AquaData Studio, Java, Perl, Python, Spring, Hibernate, VRS, PostgreSQL, Composite and MS SQL.

      BUSINESS CHALLENGE

      Asset management firms face challenges such as a generational shift in the demographic and new patterns of investment behavior. They also face changing regulations, and aggregators with low-cost products who are thinning the pool of investible funds. Our client wanted to differentiate itself by offering customer-centric solutions that are flexible and adaptable. But its existing systems presented several challenges:
      • Its front, mid and back office functions needed a lot of manual effort
      • Business rules were inconsistent and data duplication was rampant
      • User experience on the platform needed significant improvement
      • Clients were unable to get a holistic view of their accounts
      • Data validation was consuming a lot of manhours

      SOLUTION

      We partnered with the asset manager to deliver better digital experiences to all its stakeholders. We created a robust data ecosystem and used advanced technologies such as artificial intelligence/machine learning or AI/ML, intelligent automation, cloud computing and test automation.
      • Our team streamlined and integrated the client’s front, middle and back office functions. We helped the client integrate their back-office solutions with their custodians, reducing complexity in information exchange, eliminating reconciliation and increasing operational efficiency by more than 75%.
      • We automated the creation of more than 7,000 reports.
      • Improved experience for retail and institutional clients by automating the generation of complex compliance and strategic reports.
      • Developed a strategic reporting module that gave customers a holistic view of their accounts and holdings.
      • Set up a business data validation team offshore.
      • Enabled self-service option for bespoke reports.

      OUTCOMES

      Our solution helped the client significantly improve front-end experience for customers; reduce manual effort and costs in the back office; and improve overall operations efficiency. Highlights of the outcomes:
      • Automated the exhibits process with 75% increase in throughput
      • Our report automation solution reduced manual effort by 70% and improved monthly artefact generation throughput by 40%
      • Reduced manual effort for customization in client profile management by 60%
      • Achieved $50,000 savings monthly in data validation for client profile management

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      Optimized data and on-demand analytics deliver faster business insights and better UX for asset management firm

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      Striking the right balance of care

      Striking the right balance of care

      Interactive

      Striking the right balance of care

      A work-life services provider transformed the care experience for its customers with a user-friendly, intuitive and responsive web platform.

      Client

      A leading provider of work-life services to caregivers.

      Goal

      Enable caregivers to easily set up and manage care schedules.

      Tools and technologies

      HTML, CSS, JavaScript, Bootstrap, JQuery, Atlassian User Interface (AUI), AngularJS and Liferay DXP7.2

      BUSINESS CHALLENGE

      Many young and middle-aged workers combine both work and caregiving responsibilities that cover not only children but extend to parents and pets. Research shows that employees who achieve greater work-family balance are more satisfied in their jobs and happier with their families.

      For our client, a leading provider of work-life services, the key to enabling that balance is the setting up of care schedules for dependent or vulnerable family members. The client’s existing solution for managing such schedules, however, was not user-friendly, flexible, or mobile-responsive.

      The client's websites offered no provision to schedule premium services for care.

      The websites were served by a Liferay V6.2 content management system (CMS) as the common backend for which support ended in December 2020.

      SOLUTION

      We designed and developed a web platform for scheduling care for family members including parents, children, self and pets, with e-mail notifications and quick access to customer care. We migrated the websites to Liferay DXP7.2 CMS backend.

      To improve the performance of the web application, we developed website forms as AngularJS-based single-page applications. We developed a responsive website that worked flawlessly across different-sized screens on desktops, tablets and mobile phones.

      We used Agile methodologies right from the requirements-gathering phase until the final deployment of the web platform to shorten development time.

      To save cost and time, we used an almost identical codebase for both iOS and Android platforms (except for a few configuration settings and device specific features).

      Furthermore, our team performed continuous integration using automated build tools, and script and code repositories, to save time during the development, testing and deployment phases.

      We ensured that the sites we built followed the WCAG 2.0 and OWASP accessibility and security standards.

      OUTCOMES

      • The web platform we developed ensured the client’s care scheduling interface was user-friendly, flexible and mobile-responsive.
      • Customers could easily create, change and cancel schedules. They also had easy access to records and historical data.
      • The common codebase across iOS and Android ensured significant cost savings in the development and maintenance of the application.
      • Agile methodologies and a high degree of automation reduced costs and shortened the development time.

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