THE GREAT INNOVATION CHALLENGE: HOW FINANCIAL SERVICES IS EMBRACING CONTAINER TECHNOLOGY

Keith Lynch, Head of AppDev Platforms at Red Hat UK

The financial services industry has experienced significant change over the past two decades. Banks have moved to consolidate and restructure, while new digital challengers like Monzo have entered the industry and increasingly encroach on the traditional banks’ market share. Accustomed to getting services on demand, consumers want access to banking on the move, and to take advantage of the newest technologies and apps. As such, banks need to be able to quickly launch new services and applications, harness the potential of new technologies and become less reliant on proprietary infrastructure to provide better end user experiences. Implementing modern technologies will also help institutions respond to regulatory pressures such as the Revised Payment Service Directive (PSD2), which, when in effect, will allow third-parties to build financial services on top of banks’ data and infrastructure.

Whilst banks may not traditionally have been the fastest movers when it comes to embracing emerging technologies, we are now seeing best practice examples of modernisation coming from these stereotypically risk-averse institutions, which now want to enter a new phase of agility. Whereas previously organisations have tended to be tied to an 80/20 rule when it comes to digital transformation, spending 80 percent of their resource on existing apps and 20 percent on innovation, some financial services institutions are leading the charge in flipping these priorities around, or at least bridging the gap. Larger banks in particular, which have hundreds of thousands of workloads and servers, understand they have the most to gain most by standardising technologies, and as such are transforming the way they’re thinking about delivering and supporting infrastructure to bring value to the business and new services to end users. It is this understanding of how emerging technologies can drive business prosperity, as well as a genuine appetite for innovation, that will be the determining factor when it comes to which institutions prosper in the digital age.

To undertake this kind of cultural and technological change, attracting and retaining the right talent is critical. The reputation of traditional banks putting a metaphorical fence around how developers innovate does not help their cause; especially when competing with software engineering titans such as Google and Facebook and disruptive startups. Software engineers and developers want to work with new technologies, architectures and software development approaches such as containers, microservices and DevOps – whatever enables them to get the job done quickly and most efficiently, with a license to think outside the box. Now, we are seeing this become a reality, with traditional banks recognising the needs of engineering teams and giving their developers opportunities to play with new and exciting tools in an environment setup to enable them to innovate. 

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The move towards containerisation

Containers are now being treated as a given. A study undertaken by 451 Research estimates containers will be a $2.7 billion market by 2020, playing a prominent role in cloud technologies going forward. They are already being used to help solve real business problems and drive business value in financial services. We see four main drivers for businesses deploying containers. To run apps better; to build apps better, particularly making use of microservices; to run infrastructure better and take advantage of hybrid cloud; and to enact large scale business transformation.

Global financial institution BBVA is using container technology to accelerate innovation, manage the growth of financial transactions on digital devices and deliver digital banking services to its global customers. Its new IaaS and PaaS-based platform enables its developers to focus on creating applications that can support the heavy demands of global digital bank services and provide customers with the service and information they want On-Demand.

We can also look at RBS, which used container technology and a mobile application platform to help its developer team deploy apps with the speed and consistency its new Open Experience centre required. Its  vision was for a technology solution centre capable of facilitating an innovative way of thinking and growing ideas from the contextualisation stage to customer pilots. A container approach helped it to be able to quickly develop, host and scale applications in the cloud. The renewed framework promotes closer, more collaborative work between colleagues, businesses and customers. Automation was highly important for RBS –  automating the provisioning, management and scaling of applications, so its developers can focus on writing the application code for their business, startup or next big idea. This also enables developers to start coding faster, using the languages and tools they are familiar with.

Barclays too is deploying container technology as part of its wider cloud strategy. Internally, the project transformed the way Barclays consumes middleware infrastructure, moving the company from offering technology to providing a service. As a result of the aPaaS and based on its internal testing, Barclays experienced a 70 percent reduction in time needed to release a new product and an 80 percent better utilisation of underlying infrastructure.

Naturally, container security is an essential consideration for enterprise adoption.  Software companies are now merging skills, technologies and expertise together with strategic partnerships to ensure secure and trusted models for containerised application delivery are in place so that financial institutions can focus their efforts on innovating quickly. Take Red Hat’s collaboration withBlack Duck for instance. Black Duck’s container scanning and open source security vulnerability-mapping software – Black Duck Hub – is now integrated with Red Hat OpenShiftPlatform to provide reports and data on potential vulnerabilities in container images, as well as dynamically monitor the inventory – providing live alerts on any weaknesses affecting the code.

Container technology can drive an effective DevOps strategy and culture of openness and innovation to help match the speed and consistency that business and customers demand. Financial institutions like, BBVA, RBS and Barclays are already reaping the rewards of containers, benefitting from simplified, automated infrastructure and cost savings, decreased risk, improved developer efficiency, and increased agility and time from idea to production. Now, with software providers also combining expertise to maximise container security, it’s great to see more banks lead the way in taking the leap to support their business transformation agendas and ensure their customers benefit from a better, quicker and more secure service.

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