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The Role of DevOps in the Financial Services Industry

We are living in a fast-changing environment where unexpected technological, economic and political changes can be expected and where it is necessary to adapt quickly to these changes. This statement is especially true in the financial services sector, where there is a greater need to exceed the expectations of customers and provide uninterrupted service.

From small trading firms to the financial industry players—big banks and exchanges—all are racing to deliver features and content to customers more quickly, and opting for DevOps tools, practices and ideas to solve the problems arising in financial systems.

In DevOps methodology, the development and operations engineers work together in the entire service life cycle, starting from design via the process of development to production operations, maintenance and support. A DevOps approach is helpful for the adoption of various technologies such as blockchain, which is the technology behind cryptocurrencies such as bitcoin wallet. In this article, I will discuss the applications of DevOps methodology in the finance industry.

How DevOps is Transforming Financial Services

As said earlier, financial services companies face new challenges in their day-to-day operations in meeting the standards laid down by the unicorns. To support today’s digital age, many financial services companies are modernizing their back-end systems and processes.

In addition to using legacy systems and code, they can face difficulties in meeting governance requirements, complying with regulations and alleviating risk for better security. These concerns make the software innovation a slow and complex process.

But, over the past few years, the financial services sector is leading the transformation when it comes to adopting latest technologies and modern software delivery practices including DevOps, continuous delivery (CD) and Agile.

Finance executives view DevOps as a way to bring value to the market in a more safer and efficient way. DevOps allows financial services to enhance the quality and cadence of application releases while addressing compliance, security, risk and governance strategies. Now, let’s dig deeper into the ways in which is transforming the finance landscape.

Mitigating Potential Security Threats

In the financial services industry, compliance and security are major concerns and have been the major setbacks in replacing legacy practices of software development and delivery. In the initial days, DevOps practices were seen as major risk to security and the enhanced velocity of software releases it allows was viewed as a threat to security, governance and regulatory controls.

In spite of the initial setback, some enterprises that adopted DevOps have shown consistently that these practices actually reduce potential security problems and help companies locate issues and tackle threats more quickly.

Due to this many companies have embraced the automation practices that enable and enforce compliance, security and audit requirements. Today, financial services companies view DevOps as a resource for security.

Automating all the Processes

Automating the processes all through the software delivery pipeline is another essential to enhancing resource utilization, product quality and developer productivity, and allow cross-project and enterprise-scale management and visibility in financial services. For any continuous delivery or DevOps initiative, automating all the processes is becoming a major requirement for enabling scalability and speed, ensuring compliance and achieving higher product quality.

DevOps offers enterprises with an efficient approach to alleviate risk from software releases and aid the ever-evolving demand for frequent application updates. By managing all the release processes in a single centralized platform and automating the complete end-to-end pipeline, these companies gain visibility into the progress of all DevOps processes and releases and make sure they can optimize, govern and control their delivery pipelines even as they evolve.

Driving Cultural Transformation

DevOps focuses on creating an environment and a culture where the business, operations, quality assurance, development and other stakeholders work collaboratively toward a shared goal. While optimizing the technology and tools to scale DevOps adoption, embedding security practices and automating the life cycle are the major steps. DevOps is a mindset and any change in culture takes time.

This change takes time and even the financial services industry that is regulated heavily is implementing DevOps and leading the change from both the cultural and technology standpoint. Thus, the financial services companies have what they need to keep pace with the unicorns, modernize their benefits and completely harness the benefits of DevOps.

Orchestration

For many financial services companies, the four basic software delivery pipeline stages (release, deploy, test and build) consist of numerous processes that hold within them millions of jobs and thousands of tasks executed by a large number of people. These toolsets, processes and the people are often present in silos, making things even more challenging.

While existing in silos, these people may become skillful at understanding and enhancing their part of finding the solution, but from an organizational perspective, there is no end-to-end visibility and orchestrating the complete pathway is impossible. This leads to a lack of governance, errors, delays, manual handoffs and fragmented processes.

As the IT operations and development teams are often geographically distributed in these large organizations, it is important to enable shared visibility and control into the different processes, tool chains and infrastructures. Optimizing the process of software delivery shouldn’t be attacked as a separate set of problems but viewed as utilizing a system-level approach, much as the manufacturers of cars apply lean manufacturing principles all through their production lines.

The implementation of DevOps is spreading rapidly in financial services sector due to the value that this global, systems-level approach enables. DevOps accomplishes this by scaling the latest IT process across the entire organization in order to enable an end-to-end, robust pathway to production.

Eliminating friction between teams and breaking down functional silos by orchestrating every aspect of the software delivery pipeline to create repeatable, predictable processes that can operate frequently with minimal human intervention prevents many of the challenges distributed companies face.

Conclusion

Even facing strong opposition in the beginning, many organizations took a risk implementing DevOps and have benefited substantially. Today, many technologies such as big data analytics are evolving rapidly and are implemented by many organizations around the world. According to a Peoplehr post, data analytics is used to enhance various organizational activities. Those companies that embraced analytics as part of their activities have gained huge benefits from it. In the same way, any new technology such as DevOps has to be embraced by organizations in an effective manner to enhance their overall productivity.

DevOps implementation eliminates the security problems before they become a major threat and scales the IT processes across the whole enterprise, thus allowing an end-to-end and vigorous pathway to production. Every day, more organizations are switching to DevOps and not looking back. The change to DevOps culture may take time, but it will revolutionize the activities of an organization, including financial services.

— Sujata Rani

May 3, 2018
Bucking Bank Bureaucrats: From Convergent Thinking to Divergent Doing

As customers, longstanding and new, the way we interact with banks and manage our personal spending, borrowing and saving is experiencing drastic change. New digital offerings in the form of apps and online banking show commitment to customer centricity, but overall, banks are slow to adapt to the pace of change. The vast majority of bankers do recognize the strategic need to respond to their industry’s digital disruption, and are busy assessing and developing transformative technologies such as mobile, blockchain and artificial intelligence, trying to find an emerging market need and a robust business model.

How Should Banks Adapt?

The operating environment of banks is unpredictable and, therefore, requires organizational agility. This agility requires a careful analysis of customer needs and (potential) capabilities. Bankers must ask, “How can my bank move from convergent thinking to divergent doing?”

From a strategic perspective, it’s essential to understand whether the person/organization wants to be a disruptor, innovator, ideator or bureaucrat. This differentiation defines the right strategic options available to them.

N.B.: A quick proxy answer to the above question is the design of the bank’s reception and organization of the people working there, to see if it is like every other bank, or is in some way distinctive.

Value Triangulation and Differentiation

Every banking CEO needs a clear strategy that addresses their organization’s internal and external challenges. There is one global commonality for a strategic foundation: Every bank needs to deliver change rapidly and frequently. The better a bank is at improving customer experience, the more likely it will survive the onslaught of disruptors and innovators. Additionally, most banks must deliver cost reduction and drive income. Customer desire, the third corner of the triangle, is not a familiar banking concept, but a successful value triangulation delivers customer desire in the most efficient way possible.

This isn’t about value chain mapping and cost re-engineering; it’s about creating great customer experiences with adaptive capabilities and capital-light business models. All three values must be understood and practiced throughout the entire organization, especially among boards, chief executives and key decision makers to make adaptive banking possible.

Customer Experience Comes First

A culture of centralization, product-centricity and control-via-process stifles change. To be adaptive and create their own Digital DNA, banks must form new work spaces and ways of working. When bank employees don’t use their own company’s products, they are out of touch with the customer experience. They also may excuse customer complaints based on their organizational knowledge. Employees need to be the bank’s most critical customers, and ought to feel fully connected to other customers and their experiences.

New, lean business models should flow through the organization and align to the desired customer experience. The business leaders who identify the “priority customer experience features” will focus the organization on accelerating delivery momentum. Rather than requesting large-scale, product-led programs, leaders need to focus on continually launching and redefining small-scale features.

Doing so moves away from the grand strategies or silver bullet approach so often prevalent during annual planning cycles and shifts toward agile, customer-centric strategies. Organizational change is fundamental for creating adaptive banks with Digital DNA.

Fail Fast, Succeed Even Faster

To accelerate growth, adaptive technology architectures and agile software delivery methods need to be available to deliver the relevant features. A “deliver, measure and learn” approach will amplify feedback across the organization to drive commercial decision-making. This will allow banks to fail fast, yet succeed even faster. The ongoing cycle—ideating, designing, building, shipping, measuring, learning and (of course) adjusting customer features—needs to become the norm.

By becoming adaptive, the bank’s capabilities (people, methods, technologies, values) become more attuned to customer needs, making it far easier to deliver personalized offerings. For example, the bank’s data can be used to create feature personalization, allowing customers to pick and choose the right features for their needs. A customer should always be able to overwrite the choice an algorithm provides.

Innovation, Transformation and Beyond

Currently, the most apparent transformation desire and delivery exists in IT departments as opposed to business departments. Agile ways of working are often still alien to most bankers in product, finance, compliance, marketing and front-line teams.

The banking playbook has already been rewritten for the digital age. It’s an exciting time to realize great change and how disruption/innovation can become commercial reality—this means bucking the system.

About the Author / Darren Oddie

Darren Oddie is strategy director at Wipro Digital, where he works with global financial services companies on digital transformation and innovation. He’s had hands-on experience of designing and building financial services brands from a blank sheet of paper to industry leading propositions in both corporates and startups. He’s delighted that banking and customer experience are now regularly mentioned in the same sentence. Connect with him on Twitter.

October 17, 2016