Building a bank for the future based on an event-driven architecture

For the past four years, Ikano Bank has been in a large-scale transformation, re-inventing every aspect of the business. Together we are making a comprehensive change, creating a more commercially relevant bank, where we provide our customers and partners with accessible financial services.

In previous articles we have delved into the transformation of our culture and our new agile ways of working.

However, we have also been working tirelessly to establish a new technology platform. The goal has been to find a cost-efficient technology stack to ensure sustainable growth and create a platform that allows Ikano Bank to scale and deploy new features rapidly. In short, we wanted to turn traditional banking on its head and create a modern, flexible “streaming bank”.

One platform to rule them all

Currently operating in eight markets, Ikano Bank has the ambition to expand even further. The challenge lies in the vast differences in banking infrastructure across countries, making the task of creating a unified solution an intriguing one. The objective was therefore to build a platform that can accommodate market variations while ensuring a consistent user experience and product offering.

“Our starting point was the reality we are in”, says Mikael Andersson , Head of digital delivery. “We need to be able to deploy new features quicker and have a flexible set up that allows us to enter into new markets, in an efficient manner. Therefore, scalability was absolutely crucial.”

To achieve this, Ikano Bank has outlined an architectural vision for the bank—a single platform employing an event-driven pattern, with loose couplings and based on a streaming integration platform.

Loose coupling for different needs

The platform includes multiple systems, modules, and applications, each playing a crucial role in connecting various functionalities within the platform to serve the customer.

To address the challenge of different needs depending on market, each functional capability is implemented in a single system or application, ensuring economies of scale. Loose coupling between modules, systems, and applications is achieved through an event-driven architecture.

Streaming with Kafka

The new set-up uses a streaming platform called Kafka. Apache Kafka, initially developed by a team at LinkedIn and open-sourced in 2011, is a key component of the Bank’s architecture. Tech giants in Silicon Valley utilise Kafka for processing massive volumes of messages and data.

“It's important to note that an Event-Driven Architecture (EDA) isn't synonymous with an Event Streaming Platform. While EDA can be implemented using various technologies such as Microservices or Message Bus, its defining characteristics are loose coupling, event triggering, and action,” says Pravat Dalbehera , Chapter Lead for the Architect team in Ikano Bank.

Events in this context can be notifications or commands. Notifications inform that something has occurred but don't demand further action, such as a change of address. Commands, on the other hand, expect immediate action, like initiating a payment.

A streaming platform like Kafka can handle both event types, although command events may require additional logic for confirmation or error handling.

In a Microservice architecture, different parts of a computer system handle their own information and share updates through events. The upside of this is that these updates can be used in various ways by different parts of the system, depending on what they need. It's like having a shared notebook that different people can use for their own purposes without disrupting others.

“The event-driven integration platform enables seamless communication among various modules, applications, and systems. The focus on "systems of differentiation" ensures that unique offerings, such as onboarding processes, customer master data, and product pricing, remain cutting-edge. Currently, these systems run on a public cloud environment provided by Amazon Web Services,” says Wasim Akram , Solution Architect at Ikano Bank.

A platform for our future journey

The first commercial product on the new platform was launched in 2021, and since then more have followed, in UK, Germany and Sweden. Additional markets and products are in the pipeline. In conclusion, Ikano Bank’s journey towards a sustainable bank is well supported by the robust, event-driven platform that accommodates market variations while delivering a consistent and innovative banking experience to our customers. Mikael Andersson summarises the keys to the success as:

“A lot of courage, a lot of time spent, and making sure we have the right competence. But also, not doing everything ourselves. If our partners can develop something faster, they should.”