Mastering System Design: A Blueprint for Building Robust Financial Systems

A strong foundation in system design is an indispensable asset for advancing your career, irrespective of your engineering specialization. It serves as a pivotal key to success not only in interviews but also in your professional journey. Becoming an expert in system design is a gradual, enriching process, fueled by hands-on experience. Remember, it's not just about reaching a destination but appreciating the journey itself. Persistence, an open-minded approach, and an unwavering commitment to continuous learning will ultimately lead you to master the art of system design.

Now, to adeptly conquer any system design challenge, follow these seven essential steps:

Step 1 : Define Functional and Non-Functional Requirements:

When embarking on a system design journey, the first crucial step is to identify and document both the functional and non-functional requirements of the system. These two types of requirements are the building blocks upon which your entire design will be constructed.

Functional Requirements (What the System Should Accomplish):

Functional requirements outline what the system is supposed to do. They define the specific features, capabilities, and behaviors that your system should exhibit. To effectively define functional requirements:

• Gather User Stories: Start by gathering user stories, which represent the needs and actions of end-users interacting with the system. These stories help you understand the core functionalities your system must provide.
• Use Cases: Develop detailed use cases that describe the interactions between the system and its users. Use cases help in defining the specific actions and processes that your system should support.
• Flowcharts and Diagrams: Visual tools like flowcharts or sequence diagrams can illustrate the flow of activities and data within the system, making it easier to identify key functional elements.
• Prioritization: Prioritize your functional requirements to distinguish between must-have features and nice-to-have additions. This helps in case you need to make trade-offs due to constraints.

Non-Functional Requirements (How the System Should Perform):

Non-functional requirements address the quality attributes of your system. They dictate how well the system should perform its functional requirements. To define non-functional requirements:

• Performance: Specify requirements related to response times, throughput, and resource utilization. For example, define the maximum response time for a user query or the number of concurrent users your system should support.
• Scalability: Determine how the system should scale to handle increasing loads. This includes vertical scalability (adding resources to a single server) and horizontal scalability (distributing the load across multiple servers).
• Availability and Reliability: Set expectations for how often the system should be available and the level of reliability it should maintain. This might involve defining uptime percentages and failover mechanisms.
• Security: Describe the security measures that need to be in place, including authentication, authorization, encryption, and data protection.
• Usability: Detail user experience and interface design requirements to ensure the system is user-friendly.
• Maintainability: Specify requirements that make it easier to maintain and update the system over time, including code modularity and documentation.
• Compliance: If your system needs to adhere to specific industry standards or regulations, include compliance requirements.
• Constraints: Identify constraints such as technology stacks or budget limitations that might impact the system's design.

Here is a cheat sheet for understanding nonfunctional requirements:

Meticulously documenting both functional and non-functional requirements sets the stage for a clear understanding of what the system needs to achieve and how it should perform. It provides a solid foundation upon which you can base your system design decisions and ensures alignment with stakeholders' expectations. Once these requirements are defined, you're ready to proceed to the next steps in your system design journey.

Step 2 : Understand Your Users and Their Behavior:

In the process of designing a system, gaining a deep understanding of your users and their behavior is a foundational step. This stage involves meticulously researching and comprehending the people who will interact with your system. Here's a detailed breakdown of this critical step:

User Demographics: Start by defining the demographics of your user base. Collect information about their age, gender, location, profession, income level, education, and any other relevant personal details. This data will help in creating user personas and tailoring the system to match the characteristics of your users.

User Types: Identify the different categories of users who will engage with the system. In a financial system for Discretionary Portfolio Management, this could include portfolio managers, financial advisors, clients, and administrators. Delineate their roles, responsibilities, and access levels within the system.

Usage Patterns: Study how users will interact with the system over time. This involves observing the frequency of their interactions, the duration of their sessions, and any peak usage periods. For instance, portfolio managers may use the system intensively during trading hours, while clients might access it periodically to review their investments.

Behavioral Patterns: Analyze how users behave within the system. Look at actions they take, such as searching for information, initiating transactions, or communicating with customer support. Understand the sequences of these actions and their objectives.

Expectations: To meet user expectations, you must first identify them. Conduct surveys, interviews, or focus groups to gather direct feedback. Ask users about their specific needs, desires, and pain points. In the context of Discretionary Portfolio Management, users may expect real-time updates on their portfolios, clear reporting, and easy-to-use interfaces.

Technical Proficiency: Evaluate the technical expertise of your users. Some users may be seasoned professionals in finance and technology, while others may be novices. Adjust the system's complexity to match the technical skills of the user, ensuring a seamless and frustration-free experience.

Compliance and Legal Considerations: In certain domains, such as finance, users are bound by strict regulations and compliance requirements. Understand these regulations thoroughly, and design your system to support users in adhering to legal constraints. This is especially critical in systems dealing with sensitive financial data.

8. Security Concerns: Explore the security expectations of your users. In financial systems, users demand robust security measures to protect their confidential data. Identifying and addressing these concerns early in the design phase is vital.

By the end of this step, you should have a comprehensive and granular understanding of your users, including who they are, what they do, how they do it, and what they anticipate from the system. This knowledge will serve as a foundation for crafting a system that caters to the specific requirements and preferences of your user base.

3. Shape the Data Model and Storage:

Create a comprehensive data model that encompasses the data schema.

Choose the most suitable database type (SQL, NoSQL, distributed stores, or graph databases).

Strategize how data will be stored, retrieved, and updated efficiently.

4. Craft API Design and Communication:

Define the API endpoints and communication methods for interactions within the system and with external systems.

Pay meticulous attention to API contracts, request/response formats, synchronous vs. asynchronous communication, and the selection of communication protocols (REST, SOAP, GraphQL).

5. Identify Core Components:

Pinpoint the major components within your system, including core services, databases, load balancers, CDNs, DNS, caching layers, and any external services or APIs your system connects with.

6. Envision the High-Level Architecture:

Develop a high-level architectural diagram that visually depicts the components and their interactions with core services.

Understand how data flows throughout the system and how services communicate.

7. Dive into Low-Level Design:

Delve deep into the low-level design specifics for each major component.

Define data structures, algorithms, and implementation particulars.

Contemplate optimization techniques, tradeoffs, and potential bottlenecks.

But, what are the principles that should guide your system design? Here's a set of key principles you should adhere to:

Load Balancing:

Ensure that the load is distributed evenly across your system's resources to prevent bottlenecks.

API Gateway:

Centralize and manage APIs to improve security, monitoring, and control over your system's communication.

Communication Protocols:

Choose the right communication protocols (e.g., REST, SOAP, GraphQL) that align with your system's requirements.

Content Delivery Network (CDN):

Leverage CDNs to deliver content to users with low latency, saving precious server resources.

Database:

Select the appropriate database system (SQL, NoSQL, etc.) based on the data requirements and access patterns of your system.

Cache:

Use caching to store frequently accessed data, reducing the load on your database and improving performance.

Message Queue:

Implement message queues for handling asynchronous tasks and decoupling components.

Unique ID Generation:

Ensure unique and consistent identification of data entities.

Scalability:

Design your system to scale horizontally or vertically to accommodate growth.

Availability:

Keep your system available and operational even in the face of failures.

Performance:

Optimize your system for speed and efficiency.

Security:

Implement robust security measures to protect your system and user data.

Fault Tolerance and Resilience:

Prepare your system to handle failures gracefully and recover swiftly.

But how do you go about writing a system design blueprint? Here are the steps:

1. Understand the Requirements:

Start by understanding the requirements of the system. What is the purpose of the system? What tasks must the system be able to perform? What are the non-functional requirements of the system?

2. Identify System Components:

Identify the different components of the system. What are the different modules or subsystems that make up the system? How will these components interact with each other?

3. Design the Architecture:

Design the architecture of the system, defining the layers and how components will be distributed across them.

4. Define Interfaces:

Design the interfaces between the different components of the system. How will the components communicate with each other? What data will be exchanged between the components?

5. Document the Blueprint:

Finally, document the system design blueprint. This document should include all of the information listed in the “Benefits of using a system design blueprint” section above.

In conclusion, mastering system design is a continuous journey, and by following these steps and principles, you can build a solid foundation for success in your career and tackle system design challenges with confidence.

Happy designing! ?? #SystemDesign #SoftwareEngineering #Architecture