Banking 2020: DevOps revolutionizing the Financial Sector

To sustain profitably in a rapidly changing environment characterized by evolving customer demands, agile competitors, and stringent regulations, banks need to develop products fast and launch them faster. However, a complete overhaul of core systems to instill agility is impractical due to cost implications and impact on business-as-usual. What is required is an approach that can substantially reduce the development cycle time, which is traditionally quite long, some 12-18 months easily.

This article discusses how financial services firms can employ DevOps practices to cut the development-deployment cycle time for new offerings and feature upgrades. It also outlines the associated challenges and ways to avoid the pitfalls in the transition to a DevOps model.

Some banks have moved to DevOps environments and significantly improved business outcomes - typically in the form of agility in delivery. Here are a couple of examples:

A large global bank tied up with an airline to issue white label cards. Such implementations typically took 12 to 15 months to roll out. By implementing an API strategy built with DevOps practices, the time-to-market was reduced to just 6 months. Moreover, the bank has cut down the total SDLC time by 47%. New APIs and capabilities are launched in mere 12 days against 6 to 9 months earlier while the mobile versions are released every 9 days.

A single-minded focus on development, which is a hallmark of Agile methodology, results in a product that works well in the development environment but fails in the production environment. To address this, a large North American bank has created product-aligned, cross-functional teams, and redefined the role of the product owner and the Scrum master to include and manage operational aspects. Non-functional requirements such as scalability, monitoring, and deployment now form a part of product backlogs and sprint planning. With this, the bank hopes to reduce time-to-market for new offerings and introduce faster feature upgrades to existing products.

How DevOps methodology revolutionized the bank segment?

Cost Saving

Every sector is looking to cut cost and the same is true for the Banking sector. How DevOps can help reduce your cost is as follows.

• Infrastructure as a Code allows you to use template-based solutions and stop spending precious development time on manually provisioning IT infrastructure. Software engineers are more focused on the development of new features rather than the way they are delivered and deployed. And it allows for saving a lot of time and money.
• Analyze project requirements and if it is reasonable, use third-party services that help to reduce operational overhead and save costs.
• Reduce infrastructure usage in the areas where it can be reduced, shut down infrastructure resources when they are not used, and launch them again if needed. Clients pay for what is really needed at a specific period of time, which allows optimizing resource usage and costs spent.
• Use optimal pricing types of cloud resources, which allows you to gain maximum efficiency for a lower price. A few cloud cost optimization practices are as follows:
• Deleting underused instances
• Moving infrequently accessed storage to cheaper tiers
• Exploring whether hosting in a different region or availability zone could reduce costs
• Using discounts
• Setting alerts for crossing predetermined spend thresholds

Process Automation

Process Automation through continuous software delivery pipelines is another DevOps aspect which enables to optimize the resource’s work and the developer’s productivity, to enhance the quality of the products and to allow management and visibility across multiple projects also providing velocity and scalability. By managing all the release processes from a unique central platform and by automatizing end-to-end pipelines, companies obtain visibility on the progress of all DevOps processes and releases and make sure to be able to optimize, guide and control.

Security

This is the very fundamental factor that stopped or concerned firms in the financial services industry while on their move for digital transformation. Though the quick delivery process of DevOps was initially considered as a means to compromise security, many financial services on the way forward reported security enhancement and faster recovery through DevOps practices. DevSecOps came as an additional advantage ensuring a full-fledged security integration across the pipeline. Resultant, many firms in the industry started looking at DevOps as a resource to address security.

Resilient Architecture

Resilience is about tolerating failure, not eliminating it.

You cannot devote all your time to avoiding failure. If you do, you will build a system that is hopelessly brittle. If you really hope to build a resilient system, you must build a system that absorbs shocks and continues or recovers.

A UK based digital, mobile-only challenger bank was built from scratch in a year against the backdrop of highly public outages amongst incumbent banks.

For Financial Institutions, it is necessary to have such a system. Managing failures is a big part of any team and DevOps allows one to effectively deal with the failures by allowing isolation between infrastructure components, automated testing, continuous integration and continuous delivery, etc. A few minutes of downtime of a minute faulty change in the system is enough to cost these financial institutions millions of dollars.

For instance, an e-commerce payment system had to suffer because of the inefficiency of their system. They offered Gold services where one can buy certified gold bars and coins. One day, their services were down so the system was unable to acknowledge their services of sell or purchase orders which ended up in costing the company INR 50 crore in a span of three hours. This is where DevOps could have helped them. It would have helped identify that there is some anomaly in the system and would have shut down the services for that immediately. The rectification would have also been easier and faster.

Unlike some older technologies, DevOps is not monolithic and can be implemented in small steps over an arbitrary period of time. Even the sequence of these steps is flexible.

DevOps is literally transforming the banking and financial sector: it enables to provide to the market a major amount of quality services in a safer and more efficient way, in harmony with the strategies that settle governance, risk, security and conformity.

We have several examples of DevOps implementation in banking and financial services like ING Direct and BBVA, who recently presented their case histories at the DevOps Enterprise Summit.

The transition to DevOps culture requires time and a remarkable cultural change, but it can dramatically revolutionize and innovate an Enterprise.