How open source software is transforming financial services

Rapid technological change and shrinking margins in the financial world are driving the rise of open source

“Democratising code means that industry problems can be solved with community intelligence.”

Ever-increasing amounts of data and the rise of the cloud mean that the Financial Services Industry (FSI) must continuously innovate to keep up with the rapidly evolving business landscape. While financial enterprises may have opted to develop proprietary systems in the past, there is now a shift towards participating in open source software projects.

The open source approach to software is a driving force for innovation and Intel has been heavily involved in the open source revolution since the ubiquitous open source software project Linux* was first created on Intel architecture in 1991. Today, Intel technology provides the backbone for many open source-based projects and Intel also works with The Linux Foundation*, a consortium of major technology companies that provides support for Linux-based open source projects.

While open source software has been widely used in many industries for over 20 years, adoption among FSI organisations has been slower. This is now accelerating as a result of rapid technological evolution, the shift to the cloud and shrinking margins in the financial world. "The major banks have a mandate to become technology companies, and it's all about the software," said Mike Blalock, General Manager for Financial Services Industry at Intel. "Open source software allows lots of innovation, while still being compliant and coordinated. As industry evangelist Chris Skinner puts it, 'the future of financial services will be open source and real time'."1

The open source approach is vital to the future of FSI businesses, offering a number of key benefits, not least the ability to accelerate digital transformation in a cost-effective and customisable way, enabling businesses to get products to market faster. While participating in open source projects with rival companies may seem counterintuitive, the sharing of best practices and bug fixes benefits the whole community in the long run. The lure of working on open source projects also enables organisations to attract and retain some of the best developer talent.

"Using open source software enables businesses to benefit from a technology that has been already developed by the sharpest minds in the market," said Parviz Peiravi, Global CTO/Principal Engineer, Financial Services Industry at Intel. "Democratising code means that industry problems can be solved with community intelligence. FSI businesses can take advantage of code that has been developed and tested across multiple industries, adding their own flavour with custom code so that they can utilise it inside their own organisation."

Intel has one of the largest software organisations in the world and by investing in open source software, the company is able to ensure that a wide range of products and platforms from various organisations run exceptionally well on Intel architecture. Along with Linux, Intel is involved with a wide range of high-profile open source initiatives, including Python*, Kubernetes* and TensorFlow*. Intel's open source partners cover products across the entire stack, including everything from hardware and firmware to the OS and virtualisation level.

Intel's Open Source Technology Center (OTC) comprises an international team dedicated to working within open source communities. The OTC's online portal at 01.org acts as a hub for open source projects that Intel engineers are working on. These projects cover a wide range of areas including everything from cloud computing and virtualisation to analytics and user experience.

Aiming to boost the use of open source software in the FSI world is the Fintech Open Source Foundation* (FINOS*). This independent non-profit organisation boasts more than 300 contributors from 30+ member organisations, representing financial services, technology, and services firms. FINOS recently joined The Linux Foundation2 and is the vertical focused on delivering open source solutions for FSI businesses. Its goal is to break down the barriers to collaboration so that FSI businesses can work together to deliver software and standards that will benefit the entire sector. This kind of community approach is helping to bring about the culture shift needed to make open source successful. It also highlights the importance of attracting and retaining the best developer talent.

"Like every huge seismic shift in an industry, this cannot just be from the top down," said Gabriele Columbro, Executive Director at FINOS. "It's very important for us to have executives from the top investment banks at the table but you also need grassroots support. You need developers to be on board. The new generation of developers within these firms grew up with GitHub and are used to working with open source software. If you bring them into a company that doesn't allow them to do that, you're going to lose them very quickly. At the moment it feels there like there’s huge energy, spirit and excitement around these important developments and it’s going to be fascinating to see how we move forward together.”

Find out more about the best ways of using open source software to solve industry challenges at the annual FINOS Open Source Strategy Forum, taking place virtually on 12-13 November.