Forays into fintech SOA

Fiserv CBS Worldwide, Tibco Software, IONA Technologies, edge IPK, GT Software what do all these companies have in common? They are just a tiny example of the software companies listed on finextra recently for making big forays into the world of fintech SOA.

The reason for this insatiable trend? The age of proprietary, bespoke and closely guarded secret software is giving way to standardisation, interoperability and collective innovation.

Anyone who’s read the 2006 and 2008 bestseller, Wikinomics will find these principles familiar, but they may be absolutely baffling to other financial services professionals. Surely the only way to drive competitive advantage is by playing one’s cards close to one’s chest creating those core competencies that nobody else can match?

Well to a certain extent this is still true but, in terms of technology, the tide is really turning, and SOA is playing a big part in the change.

To avoid getting into a convoluted discussion of SOA, in summary it is the common use of standardised coding languages and techniques to create new and to integrate legacy software systems. What this leaves is an organisation with systems that are interoperable, easily modified and upgraded and ultimately much more future-proof than before.

This new way of working benefits fintech professionals in many ways: 

·         One benefit follows on from my previous blog on agile development. The ability to keep software up-to-date is an important implication of SOA and a vital prerequisite to being competitive in areas like black-box trading.

·         Standardisation brings benefits in terms of maintenance but also innovation. The more professionals working on SOA based developments in the FS sector, the better these systems will become, improving software as a whole. This phenomenon can even drive collective innovation as institutions and suppliers become more open with what they are doing.

·         With downturns come consolidations meaning large integration projects. The use of SOA makes the integration of enterprises much more simple.

·         The ability to make legacy applications and data ‘speak’ to each other for the first time can also create new revenue possibilities and innovative new services

While there are many more possible benefits of SOA in fintech, it is still a developing discipline. But things are changing fast and it’s truly an exciting time for the industry. The faster and further that SOA permeates the world of fintech, so much greater will the benefits we can all derive.