Richard Muirhead, CEO, Automic
Within the financial services sphere, the innovation race is on. Customers are becoming increasingly accustomed to having technology at their fingertips, meaning institutions must now be more nimble than ever when it comes to embracing new technologies. Innovating and keeping ahead of the competition — both in terms of other institutions and new non-traditional digital competitors—while meeting growing security, regulatory and compliance requirements, is a critical factor for and presents a huge challenge.
Software architectures in Financial Services are complex and are getting increasingly more complex with the advent of the digital age. Off the shelf and custom applications, which are needed for financial institutions to exist, mean complexity is a fact of life. With the convergence we’ve seen over the last decade and the explosion of connected devices, this complexity is on a steady and continual rise. So what’s the problem? It isn’t the complexity itself. It appears that outages are always related to change in some way.
The frequency of change is increasing, along with the number of components and number of people involved in any given. This can present huge challenges for financial institutions as the try to innovate while striving to introduce new functionality quickly. This increases their risk exposure and can result in failures.
There are some key areas that financial institutions need to address to help guard against the risk of IT failures:
1. Centralised packaging and tracking
Software updates and applications are often developed by globally distributed teams that are disconnected from one another physically and technically. For example, the CRM portal and the point-of-sale application can be developed by different teams, who use different technology stacks and are located on different continents. Centralisation is key, and interdependency between these artifacts should be tested and validated as early as possible, well before an application is rolled out to the operations environment.
Centrallised automation for packaging and transporting the correct artifacts can cut out the human error element, which may occur if deployments are handled manually, and decrease the risk for failure.
2. Standardised processes
Deploying application changes means following specific guidebooks in an exact order. For example, a database must be updated with the new schema before the application server can be activated. Similarly, as the number of environments, server and application tiers grow, so does the length of the deployment instructions. Specifically in mission critical applications, the upgrade or deployment procedure can be so complex that there is a complete book for administrators to follow.
In this case there often isn’t time or resources to deploy many times during the testing cycles. Here administrators often try to automate with scripts and configuration tools available, but the slightest mistake is often fatal. A standardised and well-tested deployment capability is key to avoiding these kinds of issues.
3. Abstracted deployment models
Every application an enterprise uses goes through a lifecycle of development, functional testing, integration and load testing, and finally production rollout. With each stage, the application is put on a different set of servers. The trouble here is these environments are many times larger and more complex in terms of hardware, operating systems and even the application infrastructure stack. It is not uncommon for an application to be developed with JBoss on Windows at the developer’s station and end up in production, executing under Weblogic on Linux, for example.
The implementation of an abstracted deployment model is important to ensure that even subtle differences in deployment don’t negatively impact the operation.
4. Snapshot validation stage
Every update to an application creates a new baseline of configuration, in terms of artifact versions, as well as values continuously updated, as part of many deployment processes.
Connection pool sizes and other configurations for example may or may not become mission-critical with the next deployment, but this may not be a risk worth taking. Validating the state of an application, file numbers, and the exact version in each directory, as well as configuration values in key configuration files, can mean the difference between success and outage. Emergency patches are a real weak point here as they tend to “disappear” with new versions and sometimes cause repeated outages that can take a long time to dissect.
A baseline snapshot at the beginning and end of each new update can resolve many potentially serious issues from occurring.
5. Ability to automatically rollback in time
Perhaps the best piece of advice for when things go wrong in a product environment is to undo whatever has changed and rollback to the previous version. However this can be a very challenging task, particularly in a long and complex update process.
Navigating instructions manually can take too long and in a high pressure environment this can lead to greater damage. As scripts are often used to perform high volume changes, things become impossible to reverse and rollback scripts do not exist. This critical capability can be a “lifesaver” for an institution.
As seen, there are a number of factors which must be considered but agility in new deployment is the biggest consideration – it is not just about software complexity. Extremely complex financial applications work well provided they are untouched. Often the deployment and release processes can be the root of problems and these five considerations all relate to the importance of a purpose-built application and standardised solution to offer the ability to adapt to change efficiently.
KBC Bank chooses Finastra for LIBOR transition
Fusion Loan IQ Alternative Reference Rate module and Fusion LIBOR Transition Calculator will help the bank move away from LIBOR
KBC Bank, a Belgium-based bank with operations across Europe, US and Asia Pacific, has chosen Finastra to help manage its transition through the upcoming interbank references rates changes. It has selected Fusion Loan IQ Alternate Reference Rates (ARR) module to manage new rates and to expand its lending business. The bank has also opted for the Fusion LIBOR Transition Calculator to help calculate rates ahead of the transition period.
Melinda Christens, Business Program Manager LIBOR Transition at KBC Bank said, “We’ve been using Fusion Loan IQ for a number of years, and have been impressed with the way the solution is able to continuously adapt over time, adding new functionalities in line with changing regulations. The transition away from LIBOR is daunting for most banks, but with the help of Finastra’s solutions we’re able to continue to calculate rates and embark on a smooth transition.”
Fusion Loan IQ is Finastra’s solution for commercial lending, powering 71% of all syndicated loans around the world. It alleviates the high costs of system and process redundancy within commercial lending operations, as well as increasing transparency, improving risk management and simplifying entry into new markets or business lines. The latest version of the solution, enhanced to support ARR, provides banks with core capabilities to issue new loans using the replacement rates, allowing them to begin to transition their existing LIBOR portfolio safely.
Fusion LIBOR Transition Calculatorwill help KBC Bank manage the transition before the ARR module is rolled out. It enables market participants to calculate their own ARR or Risk-Free Rates (RFR) and interest accruals. The calculator service independently accesses the ARR/RFR from external official sources, such as the Federal Reserve Bank of New York, for the secured overnight financing rate (SOFR). It then calculates compounded in arrears rates and daily non-cumulative compounded rates, along with corresponding interest accrual amounts for a set of inputs. Depending upon the rate method chosen, the calculator has the flexibility to calculate the daily compounding rates for the whole period or only for the end date. It follows Finastra’s Fusion Loan IQ ARR calculations, which gives market participants consistent and accurate results.
Built on FusionFabric.cloud, Finastra’s open innovation platform, the calculator’s open API facilitates the integration with systems that don’t yet have a solution in place for calculating ARR/RFR rates. This significantly reduces operational risk.
“The shift away from LIBOR is the biggest change the market has seen in lending over the last three decades. It is also a once-in-a-lifetime opportunity to innovate and serve customers better, and so the need for a flexible service that can expand over time is a must,” said Robert Downs, Global Head of Corporate and Syndicated Lending at Finastra. “Our Fusion Loan IQ ARR module and the transition calculator are designed to keep pace as ARR methodologies and conventions evolve, protecting our customers from risks associated with complex system changes and ultimately future-proofing their businesses.”
How contactless payments helped a pizzeria survive
By Kaushalya Somasundaram, Head of Payments Partnerships & Industry Relations at Square, UK
The Covid-19 pandemic has caused continued uncertainty for the hospitality industry. Many have been forced to pause operations or adjust the operations so they can keep trading.
Businesses are continuing to address social distancing rules by rapidly accelerating their digital capabilities. From bakeries to pubs, we have witnessed businesses shift to selling online, offering click and collect services to making their goods available for delivery.
But one of the most integral ways technology is aiding these businesses is on the payment front.
Contactless payments and cashless businesses have been around for years, gaining popularity for the ease and convenience it offers businesses and customers alike. However a new significance has been placed on all technologies that reduce physical contact and time needed to complete a transaction.
It’s no surprise the number of cashless businesses in the food and drink sector is skyrocketing, from 8% in January 2020 pre-lockdown, to 33% in July 2020.
Contactless payment technology has played a vital role in the survival of many businesses, including a pop-up pizza business based in Cambourne, Cambridgeshire.
From hobby to hub
When Sam Corban first tried his hand at pizza-making, it was out of interest. But after moving to Cambourne, he decided to turn what had quickly become a hobby into a business.
Sam approached local council offices to seek support in getting his idea for an artisan pizza pop-up business off the ground. And in February 2017, 400° Pizzeria fired up its oven for the first time, trading every Friday night at the Cambourne Cricket Pavilion.
Prior to the pandemic, Sam’s trademark 24-hour slow proof dough – which had taken him almost nine months to perfect – had garnered him a fond reputation around the village. It wasn’t long before his popularity meant he could hire his first staff member.
However, fostering a close relationship with his local community has been equally essential to Sam’s success. He has several pizzas named after customers – from the classic Nduja to The Debbie – and often asks his regulars for feedback regarding new recipes.
The success of his pop-up has influenced other local artisan street food providers, who’ve since joined him at the Pavilion on Fridays which has helped create a local hub for Cambourne locals.
Once the pandemic hit and a new normal descended on the world, Sam knew he had to react quickly and intelligently if he was going to continue doing business and be a positive force in his community.
And that all started with how he took payments.
The unexpected virtues of contactless
Despite accepting cash, Sam has always encouraged his customers to pay with card whenever possible, even pre-pandemic. It’s simply a quicker way to complete a transaction, especially now most bank cards have contactless chips.
After trying out a few contactless terminals, Sam decided to use the Square Terminal, an all-in-one card machine for everything from managing items and taking payments to printing receipts and getting paid. Once the pandemic started it was a no brainer to become completely cashless. “As all my payments are processed seamlessly through the Square Terminal, I’m cash free,” explains Sam. “This means I can process orders faster and don’t have to deal with hygiene issues posed by taking cash.”
And, the peace of mind this offers customers can’t be overstated. It means they can get a slice of community and normalcy (along with pizza) in a time where they’re cooped up at home and need to keep contact to a minimum.
As a result, Sam was able to keep operating safely and successfully throughout 2020.
A future-proofed pizzeria
Sam’s success is closely linked to how he connects and engages with his local community. As well as his weekly pizza pop up, he’s also started stocking his van with dry goods such as flour and pasta to deliver goods to those who can’t leave the house. He has even started offering home pizza making kits – giving local families a fun way to jump on the lockdown home baking trend.
These acts, plus the digital transformation he’s undergone over the course of the year, will resonate positively for the pizzeria long after this pandemic is past. Not only has he cemented his place in his local community, but the technology he’s adopted has helped him flex his operations.
As Sam shows us all, with a sprinkle of technology and a healthy serving of community spirit, every crisis can also be an opportunity to grow and evolve.
Ahead of expected IPO, Deliveroo recruits Next’s Wolfson to board
LONDON (Reuters) – Britain’s Deliveroo said on Tuesday it has beefed up its board ahead of an expected initial public offering this year with the appointment of Simon Wolfson, the veteran boss of clothing retailer Next, as a non-executive director.
The food delivery company said on Sunday it had raised a further $180 million from existing investors, including minority shareholder Amazon, in a move that values the business at more than $7 billion.
Deliveroo is set to hold an IPO in the coming months, in what would be the biggest new share issue in London for three years.
Wolfson’s appointment comes after Deliveroo named Claudia Arney as the company’s first chair in November.
Deliveroo founder and CEO Will Shu said Wolfson would bring “great knowledge and insight” to the board.
Wolfson has been Next’s CEO since 2001.
He is also a peer of Britain’s ruling Conservative Party, sitting in the upper house of parliament.
(Reporting by James Davey and Paul Sandle; editing by Sarah Young and Pravin Char)
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