Accelerating Digital Transformation in Banking and Financial Services
A recent survey from Forrester’s Business Technographics shows that 33% of BFSI tech leaders are currently undertaking a digital transformation within their organizations. That’s 13 points ahead of the average across industries.
Still, many enterprises worry that they aren't moving fast enough.
For banking and financial services organizations, there is intense pressure to transform their enterprises to remain more competitive in an age of disruption. Evolving regulatory requirements, rapidly advancing technology, increasing customer demands, COVID-19 and competition from fintech’s are all forcing financial services firms to rethink the way they operate.
Digital Transformation Challenges
This digital transformation imperative requires banking and financial services organizations to improve their technical capabilities. But true transformation demands more than just new technologies. It requires strategic vision and commitment from the top of the organization to rethink and retool its culture, its processes, and its technology.
Admittedly, the financial industry has a long history of not collaborating, lack of transparency, and resistance to adaptability, favoring instead confidentiality, siloed organizational structures, and risk aversion. For many years, that heritage enabled financial services firms to succeed. Existing cultural, behavioral, and organizational hurdles can be hard to overcome because they are so entrenched.
New processes and technology are also necessary for digital transformation. Traditional development practices are common in the industry and are built on segmented and monolithic team structures that lack the agility required to achieve transformation. Additionally, very few possess the infrastructure and application architectures required to rapidly innovate.
The Benefits of an Open Approach
Digital transformation is not merely about adopting new technologies but also establishing new cultural practices and ‘ways of working’ within the IT organization. By taking an open approach to architecture, process, and culture, you can transform the way your entire organization operates.
To create a more modular environment, banking and financial services institutions will require integration across the entire legacy network, as well as integration with partner systems, networks, and other external services such as Software-as-a-Service (SaaS) solutions. An open and composable architecture gives customers access to a growing range of ‘Best of Breed’ technologies from industry leaders, consumable in a frictionless “single-stack” feel.
In the open organization model, collaboration is key. Modern, agile practices establish common goals and empower teams to move forward together. According to the Harvard Business Review article “Reassessing Digital Transformation: The Culture and Process Change Imperative”, financial services were more apt to say that DevOps was important than other industries, and were also more likely to have implemented agile development, project management processes, CI/CD, and DevOps. These new processes are necessary as financial services firms seek faster time to value and leverage microservices to effect this change.
Open organizations are more transparent, inclusive, adaptive, collaborative, and community focused. When you view digital transformation as a continuous process—and emphasize the importance of culture in parallel to, not at the expense of, technology and process— you’re positioning your organization for a successful transformation.
Technologies that Enable Digital Transformation
The pandemic has accelerated the need for digital transformation in the BFSI segment. Not only have workforces become remote, but person to person contact has become less frequent. Financial organizations have not only had to scale up infrastructure and security to support a remote workforce but have also had to simultaneously scale to support a fully remote customer base. Inherent in this approach is a hybrid cloud strategy that allows the ability to scale up or down resources to meet application needs. Architectural design and practices must also align with these new cloud infrastructures. There is a need to balance the requirements for speed with the absolute necessity for security and availability. There are a few key best practices that BFSI organizations have used to balance these competing demands:
· Establish a foundation of resilience by adopting site reliability engineering (SRE) concepts.
· Rapidly deploy new services quickly based on market demand.
· Consolidated, consistent, and controlled security and access, including identity management, intrusion protection, anti-virus, predictive threat capabilities
· Application performance (response time and latency), on-demand scalability, and disaster recovery and backup
• Automation for eﬃciency and to speed delivery, with consistency in operations and tools, continuous integration and continuous delivery (CI/CD)
• System-wide business monitoring, reporting, and alerting.
An Open Architecture with F5 and Red Hat
Now that we have established the open approach for implementing a financial service platform and the capabilities needed for a successful digital transformation, we can examine the architecture needed to support it.
It starts on the path toward site reliability engineering (SRE). In the SRE model, the operations team and the business give developers free rein to deploy new code—but only until the error budget is exceeded. At that point, development stops, and all efforts are redirected to technical debt. As shown in Figure 1, it boils down to 5 areas that an SRE team should be doing to achieve the balancing goal.
Figure 1. Enabling SRE Best Practices
Together, F5, Red Hat, Elasticsearch, and other ecosystem partners can deliver a suite of technologies to fulfill the extension and transformation of existing architecture to an agile financial service platform.
Figure 2. SRE Microservice Architecture with F5, Red Hat, and Elasticsearch
The following describes the most fundamental components of Figure 2 in more detail, to enable the SRE best practices:
1. Red Hat OpenShift Container Platform (container PaaS) provides a modular, scalable, cloud-ready, enterprise open-source platform. It includes a rich set of features to build and deploy containerized solutions and a comprehensive PaaS management portal that together extend the underlying Kubernetes platform.
2. Combining BIG-IP and NGINX, this architecture allows SRE to optimize the balance between agility and stability, by implementing blue-green and targeted canary deployment. It’s a good way to release beta features to users and gather their feedback, and test your ideas in a production environment, with reduced risk.
3. BIG-IP combined NGINX Plus also gives SRE the flexibility to adapt to the changing conditions of the application environments, address the needs of NetOps, DevOps, DevSecOps, and app developers
4. ELK is utilized to analyze and visualize application performance through a centralized dashboard. A dashboard enables end-users to easily correlate North-South traffic with East-West traffic for end-to-end performance visibility.
5. F5’s WAF offerings, including F5 Advanced WAF and NGINX App Protect, deployed across hybrid clouds, protect OpenShift clusters against exploits of web application vulnerabilities as well as malware attempting to move laterally.
6. Equally important is integration with Red Hat Ansible that enables the automated configuration of security policy enforcement for immediate remediation.
7. Built into CI/CD pipeline so that any future changes to the application are built and deployed automatically.
Digital transformation has been accelerated by the dual challenges of Covid and the emergence of Fintech. Traditional BFSI organizations have had to respond to these enormous challenges by accelerating their deployment timelines and adopting agile processes without compromising security and availability. These practices also dovetail with the greater adoption of microservices architectures that allow for scale up and scale out of application services. F5 & NGINX helps aid this transformation by providing world class performance and security combined with a flexible microservices ADC (NGINX+). This hybrid architecture allows for Kubernetes deployments to become ‘production grade’.