Latest Aite Group Study Reveals Ways More Financial Services Firms Can Benefit from Open Source Engagement
NEW YORK, NY / ACCESSWIRE / December 10, 2019 / For financial firms, seeing the value of engaging in open source isn’t something that happens overnight–it requires a strategic commitment and understanding of the technology’s long-term benefits. Aite Group‘s new report called, “From Secret Sauce to Open Source,” addresses this issue and revealed key findings for firms looking to engage in open source. The report was commissioned by FINOS (the Fintech Open Source Foundation), a nonprofit member organization whose mission is to foster adoption of open source, open standards and collaborative software development practices in financial services and released at yesterday’s Open Fintech Forum.
“Whether or not you’re aware, open source technology is already playing a central role in the financial services industry,” said Gabriele Columbro, executive director of FINOS. “This survey shows that for firms to attract the best talent, comply with regulations and innovate with the latest technology, having an open source strategy is quickly becoming a CIO-level concern.”
The survey, which interviewed 15 capital markets firms (including FINOS members) over a nine-month period from late-2018 to mid-2019, identified several areas where financial firms can accelerate open source engagement, and in some cases, drive profound change within organizations.
Talent and Technology
Open source is changing the way financial firms develop technology and systems; “few software developers survive today without leveraging open source as part of their efforts,” according to the survey. As the role of technology becomes increasingly central to the value proposition of many firms, so does the need to attract and retain technology talent and tech-savvy financial professionals. Those firms that are further along the open source maturity curve, e.g. those who enable developers to contribute to open source projects and not simply consume them, have a better chance of attracting top technology talent. This can also have a strong reputational benefit, as being a firm known for contributing to open-source software is almost always a positive reflection in terms of reputation.
“This survey illuminates how vital the open source movement is to software development in the financial services sector,” said John Mark Walker, director of the Open Source Program Office at Capital One. “Open source is an integral part of who we are and how we work, and has helped us to build a technology company that does banking instead of a bank that just uses technology. Our engineers are encouraged to find open source solutions and actively contribute back to the community, to spur innovation across all industries.”
Developers and Engineers Have Greater Clout
As with any transformative change, adopting open source policies, processes and best practices takes time and effort but major firms are making significant progress and numerous are now active contributors to open source. Goldman Sachs, JP Morgan, Capital One and Deutsche Bank, for example, are all making significant open source contributions and many more are not far behind.
Virginie O’Shea, research director, Aite Group said: “According to the survey, key drivers for adoption include competitive advantage, attracting talent, public relations benefits, company ethos and cost benefits. As firms begin to realize those benefits and recognize the value their technologists provide and the innovation they bring, we’ll continue to see greater open source adoption in the industry.”
Compliance and Regtech Present Opportunities and Challenges
Many institutions lack a deep understanding of how open source works and the true value it can provide, which can make it appear risky, particularly in a highly regulated industry not known for collaboration. Some don’t yet recognize that it has great potential to bring value to the business-not just from a cultural or qualitative perspective-but by quantifiably improving efficiency and reducing costs. But it does.
For example, what used to be conceptually known as open source ‘compliance-as-code’ has become real. It can be described as the capability to automate the implementation of regulatory requirements into code and, when open sourced, provides increased transparency, scrutiny and collaborative working environments to address complex issues. Respondents said that this has the potential to change how banks work together as well as how banks and regulators work together.
“Open source is the underlying catalyst for meaningful organizational change in the digital age,” said Jim Zemlin, executive director at the Linux Foundation. “Like many other industries have done before, we are seeing that as more financial services companies understand the value of adopting and contributing to open source, innovation occurs faster and with greater impact.”
To download the full report, please visit the Technology Trends in Capital Markets download page.
To contribute to FINOS, please visit the FINOS Community Quickstart page.
The Fintech Open Source Foundation (FINOS) is an independent membership organization whose purpose is to accelerate collaboration and innovation in financial services through the adoption of open source software, standards and best practices. FINOS believes that global financial organizations that embrace open source software, together with common standards, will be best positioned to capture the growth opportunities presented by a quickly evolving technological landscape. FINOS has 10 programs driven by more than 30 financial services and technology members, 300+ community contributors and over 75 open source repositories. We enable collaboration in key areas of innovation for the industry including data, cloud, interoperability, and decentralized technologies. FINOS is a 501(c)(6) and is based in Burlingame, CA with an office in New York, NY. For more information, visit www.finos.org.
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