Digital transformation is not coming; it's already here. As a result, the financial industry needs to prepare for the rapid-fire changes in consumer demands and behaviors that are bound to necessitate the evolution of business processes that utilize the latest technological innovations. One of the most significant developments in recent years has been the adoption of microservices, a software development architecture that offers numerous benefits over traditional monolithic applications. Adopting microservices will allow financial institutions to build more flexible, scalable, and resilient cloud-native applications, further fostering their ability to capture additional market share and attract new generations to their technological solutions.
Microservice architecture is a software development approach that involves building applications as a set of small, independently deployable services that work together to create larger, more complex applications. In a microservice architecture, each service is responsible for specific functionality and communicates with other services through well-defined application programming interfaces (API)s. Across the whole gamut of industries, many market leaders already utilize microservices within their applications. Netflix and Uber are excellent examples of applications built around microservices, with each service responsible for a particular task: content recommendation, video playback, user authentication, or payment processing.
The Benefits of Adopting Microservices in the Financial Sector:
Being agile in the modern business environment means having the capacity to adapt efficiently and effectively to unpredictable changes in the market. Microservices enhance the ability of financial institutions to respond to these changes by allowing the companies to experiment, develop, test, and deploy novel features independently of the entire application without impacting the current provision of their services to the public. In addition, because of the independence of each microservice from its entirety, small teams can take ownership of frequent software improvements and maintenance, further promoting the company's agility.
In the digital age, volume can increase in mere seconds, which means that to be prepared for a sudden influx of user requests, financial companies need scalability, which is the capacity to handle these volumes quickly and efficiently. Microservices will allow financial institutions to independently scale particular application segments based on the traffic flowing through a specific service. As a result, it will provide significant savings as it propagates the option to scale certain services down and others up, simultaneously ensuring that resources are allocated where they are the most needed.
Microservices enable financial organizations to curate more resilient applications by making isolating and addressing issues easier. it easier to isolate and address issues. For example, in a monolith architecture, the failure of a single component can spell disaster for the entirety of the application. On the contrary, a failure in a microservice design will only affect that particular service. Furthermore, since issues and errors mainly occur during updates and deployments, a microservice architecture supports an innovative environment with limited risks. It boils down to having the ability to experiment independently with new features in an environment that will not impact the rest of the services offered by a financial conglomerate. Even if the failure occurs, the outage will be limited in scope.
Security is a highline topic for the majority of corporations in the 21st century; however, it is critically important to financial institutions as they are the primary targets of cyberattacks that seek to enrich the perpetrators. Having a microservices architecture increases security drastically because the services are independent of each other and can be isolated with different levels of protection. For example, client information can be hidden behind more aggressively configured firewalls and multi-layer encryptions, while marketing services can be less protected as their security is not mission-critical. In essence, a microservice design allows for a robust security protocol that is customized to each service offered by the business.
Implementing a microservices architecture is the way of the future of financial institutions as they seek to expand on their capacity, agility, resilience, security, and scalability as it fosters an environment that promotes innovation. The financial industry is one of the most significant sectors of the U.S. economy, so naturally, it must evolve and adapt to the ever-changing world.
Dragonspears is excited about the future, and we would love to help you and your company enter a new era of innovation and excellence. We are well-versed in microservice architecture and will gladly help your financial institution design, implement and maintain a cloud-native application that will improve your mission’s efficiency, security, resilience, and effectiveness of your mission, allowing you to focus on what you do best for your clients.