UPDATED 19:36 EST / APRIL 05 2022

INFRA

IBM unveils z16 mainframe for real-time fraud detection

IBM Corp. today unveiled the latest generation of its venerable Z Series mainframe family, powered by a new processor with built-in artificial intelligence for real-time fraud detection.

The IBM z16 will be generally available in May, the company said. It’s the successor to the z15 mainframe that debuted in 2019, and the company has high hopes it will enjoy the same success as that system, which was adopted by multiple banks worldwide.

IBM said the new mainframe comes with advanced capabilities powered by its seven-nanometer Telum processor, which is said to be the first computer chip in the world that adds on-chip AI inference. That enables the z16 to run real-time checks for fraud against a transaction as it’s taking place.

The mainframe can process more than 300 billion inference requests per day with latency of just one millisecond when conducting fraud analysis, according to IBM. The AI capabilities make the z16 mainframe a good choice for processing transactions such as loan approvals, clearing and settlement, IBM said, and it can also be used for federated learning to identify fraud risk in retail environments.

IBM Systems Senior Vice President Ric Lewis said the mainframe has always been seen by banks as the gold standard for highly secured transaction processing.

“Now with IBM z16 innovations, our clients can increase decision velocity with inferencing right where their mission-critical data lives,” he said. “This opens up tremendous opportunities to change the game in their respective industries so they will be positioned to deliver better customer experiences and more powerful business outcomes.

While most enterprises have shifted to the cloud to some degree, IBM said two-thirds of the Fortune 100 and 45 of the world’s top 50 banks, eight of the top 10 insurance firms, seven of the top 10 global retailers and eight of the top 10 telecommunications providers still use mainframes for critical processes.

The company explained that the z16 has been manufactured in the U.S., a rarity these days, and that it has been future-proofed to be resistant to attacks from encryption-busting quantum computers. It incorporates lattice-based cryptography and a Crypto Express 8S hardware security module to ensure that.

Although quantum computers aren’t viable now, there are concerns over the “harvest now, decrypt later” attack scenario, where bad guys harvest data today to hold on to it until a quantum computer can later expose that information.

“To my knowledge, the IBM z16 is the first quantum-safe system that leverages quantum protections,” analyst Patrick Moorhead of Moor Insights & Strategy wrote in Forbes. “The system will help protect against some of the future quantum attacks, like the ‘harvest now, decrypt later’ scenario.”

Charles King of Pund-IT Inc. told Network World that the AI capabilities in Telum should provide strong improvements in the way financial services firms detect and address fraudulent transactions.

“Since AI inference is performed on-chip, the z16 can perform those complex functions without moving data to/from an AI or analytics appliance, as many other vendors’ solutions do,” King said. “That could be highly beneficial in situations like the large-scale transactional environments that the z16 is designed to support.”

IBM likely has high hopes for the z16, because new mainframes typically deliver the company a nice bump in revenue given that so many customers rely on them and are keen to upgrade. As The Register pointed out, Wall Street analyst Bernstein recently said the new model could add as much as $600 million to $800 million in new revenue for the company.

IBM could benefit even more this time because its main competitor in the mainframe space, Fujitsu Ltd., last month announced it’s planning to cease manufacturing its rival mainframe systems by the end of the decade.

Image: IBM

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