Design - step-by-step modernization plan for your ABC Core Banking Application (Java, On-Prem, DB-centric)

 Below is a clean, modern, step-by-step modernization plan for your ABC Core Banking Application (Java, On-Prem, DB-centric) with a target architecture + tech stack + design explanation.

I’ll keep it practical and interview-ready, not theoretical.

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1️⃣ Current State (As-Is – Problems)

Architecture

• Java Monolith (On-Prem)

• Tight DB coupling

• REST interfaces directly hitting core DB

• Near-real-time DB sync (Partner & Regional)

• File-based batch integration for Partner (Req-3)

Key Issues

• ❌ Hard to scale (vertical scaling only)

• ❌ DB sync is risky & tightly coupled

• ❌ File-based batch = latency + failure handling pain

• ❌ Slow partner onboarding

• ❌ No observability, limited fault tolerance

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2️⃣ Target State (To-Be – Modernized Architecture)

🎯 Modernization Goals

• Decouple core banking from partners

• Near-real-time event-driven data flow

• Horizontal scalability

• Zero DB sharing

• Cloud-ready (even if still On-Prem initially)

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3️⃣ Proposed Modern Architecture (High Level)

            ┌──────────────┐
            │  Channels    │
            │ (Web / App)  │
            └──────┬───────┘
                   │
            ┌──────▼───────┐
            │ API Gateway  │
            │ (Auth, Rate) │
            └──────┬───────┘
                   │
     ┌─────────────▼─────────────┐
     │ Core Banking Microservices │
     │ (Account, Txn, Customer)  │
     └──────┬─────────┬─────────┘
            │         │
     ┌──────▼───┐ ┌──▼────────┐
     │ Kafka    │ │ DB (Own)  │
     │ Event Bus│ │ Per MS    │
     └──────┬───┘ └───────────┘
            │
   ┌────────▼─────────┐
   │ Partner Adapter  │
   │ (Async Consumers)│
   └──────┬───────────┘
          │
 ┌────────▼───────────┐
 │ External Partners  │
 └────────────────────┘

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4️⃣ Modernization by Requirement

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✅ Req-1: REST Interface (Modernized)

Before

• REST → Core DB directly

After

• REST → API Gateway → Microservices

Tech Stack

• Spring Boot 3

• Spring WebFlux (non-blocking)

• OpenAPI (Swagger)

• OAuth2 / Keycloak

Benefits

• Security centralized

• Rate limiting

• API versioning

• Easier partner exposure

---

✅ Req-2: Partner & Regional – Near Real-Time DB Sync

❌ Stop DB-to-DB sync

Modern Solution: Event-Driven Architecture

Flow

Core Service → Publish Event → Kafka → Partner Consumer

Example Event

{
  "eventType": "ACCOUNT_UPDATED",
  "accountId": "12345",
  "timestamp": "2025-12-19T10:30:00"
}

Tech Stack

• Apache Kafka

• Debezium (CDC – optional)

• Avro / JSON schema registry

Benefits

• No DB sharing

• Near real-time

• Replayable events

• Loose coupling

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✅ Req-3: Partner – Horizontal (File-Based → Modern)

Before

• Batch file drops

• Manual retries

• Time-based processing

After (Two Options)

🔹 Option-A: Event-Driven (Recommended)

• Kafka consumer pushes data to partner

• Retry + DLQ support

🔹 Option-B: Managed Batch (If File Mandatory)

• Spring Batch

• S3 / NFS as staging

• Metadata tracking

Tech Stack

• Spring Batch

• Kafka Connect (if needed)

• SFTP replaced by APIs where possible

---

5️⃣ Database Modernization

Old	New
Shared DB	DB per Microservice
Oracle only	PostgreSQL + Oracle
DB sync	Event propagation

Optional

• Redis (cache)

• Read replicas for reporting

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6️⃣ Infrastructure & Platform

Phase-1 (On-Prem Friendly)

• Docker

• Kubernetes (OpenShift / Rancher)

• Helm

Phase-2 (Hybrid / Cloud)

• AWS EKS / Azure AKS

• RDS / Aurora

• MSK (Kafka)

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7️⃣ Observability & Ops (Very Important)

Add

• Prometheus (metrics)

• Grafana (dashboards)

• ELK / OpenSearch (logs)

• Jaeger (distributed tracing)

Why

• Faster issue detection

• SLA monitoring

• Partner failure isolation

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8️⃣ Security Model

• API Gateway → OAuth2 / JWT

• mTLS between services

• Secrets via Vault

• Audit logs (mandatory for banking)

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9️⃣ Migration Strategy (Safe & Incremental)

Strangler Pattern

1. Keep monolith running

2. Extract one service (Account)

3. Route traffic via API Gateway

4. Publish events from monolith

5. Gradually decommission legacy

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10️⃣ Tech Stack Summary

Layer	Technology
Backend	Java 17, Spring Boot 3
API	REST + OpenAPI
Messaging	Kafka
DB	PostgreSQL / Oracle
Batch	Spring Batch
Cache	Redis
Container	Docker
Orchestration	Kubernetes
Observability	Prometheus, Grafana
Security	OAuth2, Keycloak

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11️⃣ Interview-Ready One-Liner

“We modernized the core banking system by decoupling DB-centric integrations into an event-driven microservices architecture using Kafka, API Gateway, and containerized Spring Boot services, enabling horizontal scalability, near real-time partner sync, and improved fault tolerance.”

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If you want, I can:

• 📌 Draw text-based architecture diagrams

• 📌 Create PPT / PDF for management

• 📌 Map this to TOGAF / Banking reference architecture

• 📌 Convert into resume / interview answers

Just tell me 👍