Banks and other early Fintech companies, which were built on legacy or some other system are quickly realizing how difficult it is to make changes to their digital services. The recent evolution of cryptocurrencies and marketplaces are putting a lot of pressure on banks and fintech companies to up their digital game. Most of them are realizing that making changes to their bulky systems is extremely costly and time-consuming. Enter; Microservices.
Microservices are in essence a way of programming, that structures an application as loosely compiled services. Just imagine building a house with giant Lego blocks, instead of boards and screws; the lego house allows you to easily addon, change, and remove features.
Will traditional establishments adapt or fail?
Very few thought that the internet would take off. We all know now that those who adapted early like Jeff Bezos, profited immensely; and those who didn’t, like Sears or Toys R Us failed. The financial sector is facing a similar shift. New technology like Blockchain, AI, cryptocurrency, and Microservices are changing the market. The way the consumer spends, borrows, invests, and stores capital is changing. Our phones are quickly becoming our wallets, our banks, and our lenders. AI is becoming our financial manager.
If traditional establishments are going to survive, they will need to start adapting to the current and upcoming market. This means they need to start updating their tech stack. Being that most of these organizations are very large and already being used, it would be extremely difficult to start over. According to a survey by RedHat, 76% of Openshift respondents stated that Microservices are being used to re-architect existing applications just as much as creating new ones.
There are many benefits that come with Microservices.
- Agility — Microservices allow an application or company to move more quickly and easily. This means that companies are able to adapt quickly as the market changes and stay relevant. This could be as simple as adding cryptocurrency to your lending platform or using AI analysis risk.
- Improved Scalability — Often startups face problems when it comes to scalability. When it comes time to grow or add features, it oftens becomes a huge and costly hurtle. With Microservices, an application is much more scalable and helps by reducing the cost and security risk of scaling.
- Faster Time-To-Market — Microservices allow an application to be developed much faster. Whether you are adding-on or building a completely new system, Microservices saves times and increases developer productivity.
- Easier Debugging and Maintenance — Debugging is very time-consuming especially when it comes to re-engineering an existing application. Microservices are easier to debug because you have multiple services compiled together instead of one large mess. Maintenance is also less time consuming as you are able to maintain each service individually.
- Continuous Integration (CI) / Continuous Deployment (CD) — Many fintech companies and e-lending companies are continuously integrating new services and deploying
- new applications. Microservices make it much easier and allow companies to do so without having any costly downtime.
Managing Microservices is easier.
Implementing Microservices will require a change in how companies manage their application, but in the long-run, it will be much easier and less costly. It requires fewer developers to manage Microservices in an application than it does to manage a traditional system. Microservices are much more organized and allow developers to quickly find problems and view each service in an application individually. This means that applications built with Microservices are less buggy and more secure. When dealing with technology, time is always against us. New threats, new updates, new technology are all coming out on a daily basis; at least with Microservices you’ll be able to adapt much quicker.
AI and Blockchain work well with Microservices.
Blockchain was thought to be a hype and quickly proved its worth with record transaction times and unmatched security. Blockchain also opened up the door for many p2p and b2b lending applications by solving problems that these applications faced. New applications built on blockchain are outperforming existing ones that traditional financial institutions have. Banks are being forced to explore blockchain and try to figure out how to implement it on top of their old system. We are seeing the same thing with AI. AI is quickly evolving and proving itself extremely useful. AI is able to personalize e-commerce recommendations on Amazon for millions of shoppers. AI is driving cars and managing our retirement accounts. There is no doubt that we will see huge investments in the next couple of years in AI and blockchain. Microservices is the perfect venue for an organization to implement both AI and blockchain. Since both of these technologies are in their infancy, there is no doubt that we will see both evolve quickly over the next few years. This is another reason that companies should use Microservices as it will make it easier to update and adapt to the future.
What will the future bring?
As we watch Amazon take over the world and Sears slowly drowned, we can’t help but wonder what the future will bring for the financial industry. Which companies will adapt, which will rise, and which will fail? Our world is changing from the way we communicate with each other, how we shop, and how we manage our money. With AI it is getting smarter, with Blockchain it is becoming more secure, and with Microservices it is becoming more agile. We are witnessing a shift and many industry leaders in the financial industry are being faced with some important decisions. The best decision they can make is to be quick to adapt before it’s too late. Thus, we are seeing the rise of Microservices being used by startups and established companies alike.