Tech adoption in finance and banking: Clouds, APIs, DevOps, and Emerging technologies
In this article, I will show you some hard data on what technologies are being adopted in the finance and banking sector. We are /Data; we help the world understand developers. Annually, we serve more than 30,000 developers. With more than 80 partners, we run two survey waves annually and collect data across 150 countries. Based on that collected data, we help organizations understand developers and the tools they want to buy.
Cloud technologies adoption
We asked developers, “Where do they store the data?”
These are the answers, and these are split between financial professionals in the financial services and banking sector, compared to others, which is the light blue. There are a few things to note here. First of all, on-premise and private cloud are the top. It makes sense to have a lower reliance on local device resources. But what is interesting is that the public cloud is being more broadly used in the sector versus others and may sound counterintuitive. But you have to think of what is being stored and where. The dark blues are bigger, which means that the financial sector uses multiple storage places and multiple ways to store data, which means the right data is at the right place. Thus, in this case, the public cloud is most likely used for data that is not very sensitive.
The real value is cutting this data down into pieces and understanding who does what in terms of company sizes, precisely what they’re working on, etc. We have huge brands, and we also have freelance contractors that will just be building models, perhaps, to predict something. Or we may have small start-ups with an API.
Usage of clouds and other storage changes with company size. As company size increases, private clouds and on-premise are used more, and public cloud usage decreases. However, it does not go steeply down. There’s an inflection point for medium size. Afterward, it goes down steeply, but then it flattens out, strengthening the argument that it is being used for specific reasons.
APIs are used more by medium-sized companies to store data, and then the usage reduces. The hybrid cloud is the exception initially, perhaps for small organizations, but otherwise, it’s flat, which means that it’s equally important across the sector. So you can use a hybrid model in several projects.
You have to remember that we have a very diverse set of teams and people in companies. Usage does vary with company size, among other things.
Technologies used in backend development
We asked backend developers what technologies they use in backend development. When we compare financial services and all other industries, this is a split. And again, there are a few things to note here. First of all, containers are the most popular technology currently in the backend. But even more so in the financial sector. 70% are using containers. There is far more extensive usage of container orchestration tools. There are legacy enterprise systems and virtual machine infrastructure as a service. These are the ones that stick as being used more in financial services in backend development. However, they tend to use pretty much everything, which means there is a diversification of technologies used for backend development. They know how to use different technologies and the right technology for the right job.
Cloudification in the financial sector
We asked the developers, “Have you migrated any apps that previously ran on-premise or locally? And if so, how many?” Cloudification is as relevant in the financial sector as much as elsewhere. It’s more likely for developers in the sector to be migrating multiple apps at a time rather than what’s happening compared to other industries. 70% are migrating more than four apps, which indicates the diversity in the number of applications.
But why move to the cloud? Why migrate?
Though reducing costs is one reason, there are more interesting ones. The top two, and far more interesting in the sector than others, are to improve scalability and performance or improve reliability. It is also about doing something about the outdated technology stack. Security is also a reason to migrate, rather than not a reason to migrate to the cloud. It may be odd for big companies and huge financial organizations, but it is prevalent with small companies building an API, for example. And perhaps this is a case of externalizing risk rather than having something locally.
DevOps in banking and finance
DevOps is also being adopted vary widely. We asked developers in which DevOps activities they are involved. It’s a comparison of financial versus everyone else in the professional world. It’s higher across the board, especially a big difference for continuous integration and deployment. This means that the sector is getting into the pains of building streamlined software delivery practices to remain nimble in a highly regulated environment.
Overall, there is a trend towards increasing efficiency by taking advantage of the cloud so that smaller companies move to the cloud for security and privacy reasons and use DevOps to streamline deliveries.
Emerging technologies: Which are of higher interest
We asked developers in our survey what they consider the next emerging tech. At the top are Blockchain and cryptocurrencies sectors. Interestingly, blockchain applications other than cryptocurrency have caught the eye of the sector more than others. It makes sense because they’re experimenting now or even using Blockchain to see how they can prove secure transactions, transparency, and flexibility. Overall, they’re focusing on the most relevant things to their sector. Other technologies are interesting to other developers that are not that interesting to developers in the financial sector. Biometrics is a lot of interest to other developers. 5G is not that interesting to developers in the financial sectors.
- To recap, public and hybrid clouds and third-party APIs are more prevalent in the financial sector and elsewhere to store data. While private cloud and on-premise remain at the top, large organizations do things differently from small companies or freelance consultants. Multiple solutions are being used; it’s a matter of storing the right data in the right place – the more sensitive goes on-premise, the less sensitive go to the public cloud.
- Professionals in the sector use multiple backend technologies, especially containers, container orchestration tools, IRS, and legacy enterprise systems.
- Cloudification is as relevant in financial services as it is elsewhere. The reasons to move to the cloud are improving scalability, performance, and reliability. The problem of the outdated technology stack is also an important reason in the sector to move to the cloud. Security is also the reason for cloudification rather than against it.
- Financial institutions also widely adopt DevOps, which implies that they have adopted a streamlined delivery process to remain nimble in a highly regulated environment.
- And last but not least, Blockchain and cryptocurrencies are the emerging technologies of higher interest to developers in the sector rather than others. In contrast, other popular technologies, such as 5g, are not that interesting to them.