What will it take for financial services companies to compete (and win) in today’s software-driven marketplace? There’s no question the sector is hyper competitive – and getting tougher all the time. Tightening regulations, roller-coaster markets, competition from innovators and disruptors and consumer demands are keeping every player on its toes.
On the product development front, many financial services companies are challenged to keep up. Tool sprawl, legacy systems, calcified processes and the lack of automation can slow innovation and hobble efforts to meet compliance and governance mandates that get stricter every year.
Market leaders know that it’s no longer enough to be a great bank. The best ones are transforming to become digital disruptors and using DevOps principles to propel growth with innovation, out-compete rivals and deliver value to customers faster.
I recently hosted a webinar featuring executives from U.S. Bank, Broadridge and Forrester to find out where the financial services industry is headed and the ways digital transformation is turning great banks into technology-driven powerhouses.
These experts agree on the big picture: There’s a historic transition underway from brick and mortar banking to a new digital-centric world characterized by banking everywhere, anywhere and anytime.
This new reality is putting pressure on banks to fundamentally rethink how they deliver and govern new digital systems and redefine customer value.
To be competitive in the sector today, experts told us, innovation is paramount – even more so than speed. “While it helps to be fast, the focus should be on leveraging speed as a buffer that affords you the time to innovate and discover new routes to value,” says Charlie Betz, a principal analyst at market researcher Forrester.
Innovation will require experimentation, Betz says, and also a new form of decision-making. It’s an approach that is akin to going through a revolving door: It’s easily reversible. Of course, that way of thinking is what DevOps is all about: Continuous integration, automated delivery and a reliance on fast feedback so you can make fixes and changes earlier rather than later.
Think of it this way: By the time you pack that parachute and walk through that revolving door, the competition has been around that door half a dozen times and figured out a better way to deliver value to customers and has taken some of those customers from its competition. It’s no surprise, then, that when it comes to DevOps priorities, the leaders we talked with are focused on “shifting left” — that is, moving software testing and feedback closer to the early stages of development, allowing for faster fixes and more efficient experimentation.
At many financial services companies, a crucial objective for IT is to boost developer productivity, which in turn can help increase software velocity and quality. Measuring efficiency can be a bit elusive, though, but Steven Weinstein, senior vice president of technology service and solutions at Broadridge Financial settled on a good proxy: the number of Jenkins jobs they run per month. (They are currently up to 30,000 per month and increasing that total by 2,000 new jobs per month.)
Steven Weinstein, senior vice president of technology service and solutions, Broadridge
Leaders also stress the importance of driving consistency and knowledge sharing across teams, and many are moving to a common software deployment platform powered by a single, integrated portfolio of tools. Breaking down silos and fostering cross-functional enterprise teams are important priorities for many of these organizations.
Others are ensuring a common experience by moving development to the cloud and mandating the use of a shared set of automation processes and tools prior to moving there. They are also sponsoring DevOps “communities of practice,” centers of excellence and self-service portals to help developers thrive in the new environment.
Governance and regulations loom large in the financial services world and the leaders we talked to felt that the process of governance will change significantly in the digital era. Although the process would be slow, ultimately the new governance model must become more focused on principles versus processes. “It will be more about ‘what,’ not ‘how,” Forrester analyst Betz told us.
Specifically, a new governance model will need to accommodate increasing levels of technological dynamism, such as microservice-based architectures and continuous delivery, which is swiftly replacing what used to be a fairly predictable transactional architecture.
Experts foresee the end of “stage-gated governance” – a model better suited to the old world of “waterfall” software development. That’s when you paused after every “batch” so experts could come in to check over the code. “It’s like when guards in medieval times checked your cart before you could enter the city gates,” Betz says. “The industry will need to replace that model with new governance models based on the continuous software flows that now predominate in DevOps-powered organizations.”
How do financial services firms get started on their journey to a DevOps transformation? Leaders say that it’s smart to start small with a project that you can be reasonably sure will generate business value. Getting early wins will inspire confidence among developers and business colleagues.
Swati Shah, senior vice president of emerging technology, U.S. Bank
What’s more, don’t take on too much risk by experimenting with a project that could put the business in jeopardy. And for the same reason, don’t try to tackle too much at the same time. “Don’t try to bottle the ocean,” says Swati Shah, senior vice president of emerging technology at U.S. Bank. “Start small then gradually go faster.” It’s also safer to target components that are architecturally modernized, such as APIs and microservices, which allow for faster experimentation. Finally, Shah recommends choosing a team of people who are genuinely excited about DevOps and passionate about learning new things. “This will help ensure success,” she says.
At the end of the day, financial services leaders say that the goal of DevOps shouldn’t be about DevOps itself but about business outcomes. DevOps is not an end in itself. It’s about striving for particular outcomes, making things better for our employees and more importantly, our customers.
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