Welcome to part 1/2 of our blog exploring banking innovation industry threats and market conditions. We will discuss how DevOps and CI/CD tools can help to mitigate threats. Part 1 will also discuss why tools like Jenkins, CloudBees CD/RO and CloudBees Software Delivery Automation can help banks meet customer needs.
Let’s deep dive into Part 1.
The Existing Financial Industry Threats and Market Conditions 2022
The banking and financial industry face some tough challenges that many other industries are not as exposed to including:
- Continually increasing regulations.
- Continuous threat of cyber-attacks.
- Disruptive innovation from outside of the sector.
- The amount of change in the demographics of their customers through generations of change and wealth distribution.
In parallel, the very nature of money has also radically changed. It is now the norm to never actually handle money. Direct deposits are made into employee accounts, purchases are made by credit and debit cards, and B2B and B2C payments to suppliers are made online. You no longer need to visit a bank or ATM to make a deposit. Investments and the accounts they are held in exist in the ether and International capital flows occur across data networks.
Consumer habits and expectations have changed, and so to has the financial industry.
How the financial industry is responding
Strategies for dealing with regulations, cyber threats and technology innovation are defensive in nature.
With the exception of innovation driven by non-traditional challengers, these shifts in the industry are not growth strategies. The changes taking place require tremendous resources, but really don’t add to the bottom line. We are moving to an era where all companies in every industry are essentially becoming software companies.
This transition to a new norm requires an accelerated focus to create new applications quickly. Enterprises are competing to innovate in record time. The old saying, “He who hesitates is lost,” has never been more apt. Applications have to be developed and delivered to market in record time in order to both meet and exceed customer demand.
This tectonic shift offers tremendous market advantages for banks providing they have agility in their software delivery processes. Customer loyalty in the banking industry has transformed from being built solely by personal interactions, to being built on offering the most innovative, secure and high-quality digital interactions. Acceleration of new functionality and delivery of new applications is the new competitive advantage.
The Customer Experience Revolution
Focusing on, and enhancing the customer experience is the new hard sale. Customers expect exceptional service and are driven by banks who understand their needs in a digital era. They want to talk to someone only when they have to. But self-serve has to be as frictionless as if an expert was handling their task instead of their device.
Building more branches has been replaced by a dynamic, multichannel delivery model that is available 24×7.
Loyalty generates growth
In 1994, Bill Gates commented that “banking is necessary but banks are not” – an insightful comment that has become conventional wisdom. Therefore, customer loyalty is no longer a function of a good banking relationship. Instead, frictionless, on-demand multi-channel offering creates great customer experience. And great customer experiences lead to greater customer loyalty.
Loyalty offers profitable growth. And increasing loyalty through customer experience requires the correct resource allocation.
To meet the increasing expectations of customers, banks must accelerate digitization and ongoing enhancements of processes, services and products. Speed and quality of application development is competitive advantage.
Engaging applications enable banks to more effectively apply customer analytics, leading to deeper customer knowledge and even more targeted products and services. This equals more loyalty and growth.
More Applications, Faster, with Less Cost and Risk
Innovative banks that delight customers and achieve robust growth require the continual delivery of new and improved applications. In the race to offer new and enhanced services, bank executives demand speed and quality innovation.
Application development and operations teams are under great pressure to meet business demand. Development and operations organizations are tasked to build, test and release new applications and incremental updates to existing applications within shorter cycles.
Adopting DevOps practices is a key enabler for companies to deliver a continual stream of new and improved applications. DevOps practices promote a collaborative culture that reduces application delivery time. It also improves quality through improved productivity and efficiency. On top of this, DevOps also emphasize effective communication and collaboration methods between development, operations, testing and quality assurance teams. However, integrating DevOps into an IT organization requires an organizational culture shift. Ironically, an increase in regulatory compliance mandates supports the acceleration of internal collaboration. It is common in banks to have their own IT teams, resulting in a series of IT silos across the enterprise.
The most recent US Federal Reserve Basel rules focused on capital requirement ratios that necessitate IT centralization. What do these new regulations have to do with accelerating application development? A lot. With a federal mandate for IT consolidation, the cultural barriers oftentimes difficult to overcome become easier to navigate in the shift to DevOps.
DevOps and Continuous Delivery
While DevOps centers around the collaborative effort for rapid and frequent application development, testing and delivery, there is no single DevOps tool. In fact, DevOps is not about tooling, it is about culture. There are however a variety of tools commonly used across the entire development and delivery process by successful DevOps teams, including both proprietary and open source tools.
DevOps teams increasingly use continuous delivery as a process to enable development teams to continually deliver secure and tested code in a production-ready state. Automation significantly accelerates software delivery and transformation to a DevOps environment. As pressure from the business increases to deliver new and improved applications, more pragmatic tools are required. This helps avoid:
- Higher costs of support and training inherent in the deployment of a variety of tools across IT teams
- Risks related to the overwhelming task of managing updates and patches to a myriad set of tools
- Barriers to collaboration resulting from use of disparate toolsets
Achieving both continuous delivery and ultimately a DevOps culture requires the right tools to expedite the transformation. We have lots of tools to support these goals, and that’s part of the problem in transforming to a DevOps culture. Without rationalization, these toolsets can lead to more cost, risk and barriers to achieving a DevOps culture. Digital products and services must be expedited to the marketplace in order to gain feedback, which should in turn go back into the product development process.
Tools of the (DevOps) Trade
Jenkins
Jenkins is an open source automation server used by millions of IT personnel around the world to support continuous integration and continuous delivery processes. It enables development teams to continuously deliver secure and tested code in a production ready state at all times. To accomplish continuous delivery, application delivery teams incorporate automation to deliver software more rapidly and with fewer errors. This open-source automation server is already the de facto CI/CD tool of choice.
Built with Java, Jenkins is open source software, and is supported by a robust and active community with over 300 plugins to support building and testing virtually any project along with CloudBees and it’s hundreds of implementation and service partners, such as SPK. In addition, Jenkins has an extensible architecture, giving it the ability to work with virtually any tool and technology. Jenkins is ubiquitous around the globe and is being used by software delivery teams within numerous enterprises – including many global banks and financial institutions.
CloudBees Software Delivery Automation
CloudBees Software Delivery Automation (SDA) enables enterprises to optimize their software delivery process for increased innovation and security by connecting, automating and orchestrating the tools and functions across development, operations and shared service teams.
SDA products connect, automate and orchestrate the tools and functions across development, operations and shared services teams. By eliminating organizational silos, banks can optimize their software development and delivery process to bring digital products from idea to production quickly and safely. This shift allows banks to innovate and meet the market where they are.
On top of helping the delivery of software, SDA also provides insight into the full software delivery lifecycle, enabling increased velocity and reducing risks related to unmet deadlines, budget and security issues. They enable modern software development and delivery in complex, regulated banking.
A Banking DevOps Journey
Broadridge has taken a DevOps approach, powered by CloudBees, to re-architect how the company develops and delivers business critical software for its financial customer transactions – from how brokers process their books to the features used on the trading floor.
What’s next?
In the next article in this series, we will discuss open source applications and how Enterprise can adopt them with specific circumstances and risk mitigation strategies, how CI/CD is done in the banking industry, along with digital product trends in the banking industry that DevOps practices will support. Stay tuned for Part 2 to be published soon.
