Open source technologies are increasingly attractive to financial services firms, fintechs and payment companies. They are in broader usage across the sector as they are more widely available and are easy to adopt, lowering the barriers for usage in new projects.
As well as helping clients reduce software and infrastructure costs, the increasing adoption of open source is fueling innovation across the sector and has become increasingly key for firms across financial services and payments. Open source is ideal to use in sandbox environments and experimentation, often leap-frogging existing legacy technology stacks. Its wide acceptance and growing ease of use helps firms to drive strategic decision-making and deliver their operational goals.
The psychology of engineers often fuels further innovation. Typically, they like to work on cutting-edge projects and they appreciate the peer recognition that stems from contributing to open source projects. Using the software also makes it easier for firms to start small on new projects without having to go through a protracted procurement or tendering process. This in turn can deliver crucial time to market advantages, accelerate the development process and – through lower cost - quickly build a portfolio of innovative projects.
In addition to the benefits outlined above, the uptake of open source technologies by financial services and payment firms is also being driven by the growing prevalence of cloud resources. In fact, the two technologies often go hand-in-hand.
One of the reasons they are such a good combination is the fact that they came of age together. Open source NoSQL database technologies like MongoDB and Cassandra are highly-scalable, flexible and good for big data storage and processing, all qualities that the use of the cloud can further support.
The two technology areas complement each other really well. Traditional applications, e.g. those using a commercial RDBMS as a database, can of course be shifted to the cloud but will not necessarily benefit from scale advantages and the more flexible way of provisioning resources that cloud infrastructure brings.
Today, adopting open source typically means deploying cloud-native apps and migrating workloads to a public or private cloud built on open source infrastructure.
Open source often provides foundational technology, including languages, libraries and database technologies that can provide a rich foundation to quickly develop applications. Firms can maintain cost-effectiveness, while tapping into the expertise of the open source user community. Also, deploying open source in the cloud allows firms to adopt a more agile operating expenditure-based model, sourcing capacity when they need it, which in turn leads to lower capital expenditure.
In addition, open source technologies have to be weighed against the increasingly deep and proprietary tech stack offered by the main cloud providers as they can provide some insulation against the problem of vendor lock-in. That, coupled with an increase in the uptake of managed services options, is making open source still more attractive to financial services businesses and further driving innovation within these organizations.
