Just install the new driver either alongside (don't forget to update your datasource configuration in this case) or replacing the old one.
So I don't need to update the driver at application server level. Rather I can just have the driver in my war and can start using the datasource.
Let me know if my understanding is wrong
it all depends on how your datasource is declared. If it is a global datasource defined using a declared driver then you must update the server.