Most banks have already digitized their services to automate routine tasks, enhance employee productivity, and increase ultimate client satisfaction. Software solutions allow organizations to facilitate the opening of bank accounts, the processing of payments, the generation of invoices, the creation of documents, and their signing.
However, software systems must be highly available, scalable, and performant to prevent customer toss. Companies also need to be agile in delivering new apps and top-level features as a competitive advantage.
To solve the issues mentioned above, microservices can be developed. Some financial institutions, such as Capital One, PayPal, and Monzo, have already adopted microservices architecture, which is easier to deploy and maintain.
Using a microservices architecture in banking offers several advantages, say software developers at none other than Surf. This model will help you understand what microservices are, what challenges they are meant to solve, and how you can apply them to your own organization.
Microservices Architecture in Banking
An application composed of microservices is a managed collection of small, slackly coupled services, each handling a distinct function, such as email management, reporting, or data analytics. HTTP/REST and AMQP are lightweight and asynchronous protocols used for communication between these services.
The underlying principles of a microservices architecture in banking are:
There are a variety of technologies available that can be used to develop services, including programming languages, various frameworks, and also databases.
It is possible to build, deploy, manage, and scale services independently. So, introducing all new and latest functionality or making minor changes doesn’t necessitate rewriting the entire banking system.
Software specialists can divide a component service into smaller services to advance scalability and maximum maintenance if it becomes more complex.
Microservices Architectures in Banking: Top Advantages
1. Scalability
Bank software solutions must maintain the increasing number of requests and users while serving thousands of customers. Several common problems can arise due to a scalable system, such as performance issues, downtime, and errors.
In addition, to outrun competitors and gain clients, financial companies should introduce new features and updates rapidly. When you have monolithic applications, this is a challenging task. In addition, it may even be impossible to extend a software product built on a legacy stack.
Banks can solve these challenges by decomposing monolithic apps into considerable services or building a microservices architecture. AWS and Microsoft Azure are cloud platforms that provide scalability by enabling the creation of microservices.
Therefore, software developers can automatically scale computing resources based on various factors, such as the volume of traffic fluctuating throughout the day.
2. High availability and fault tolerance
Microservices advanced architecture solutions are also highly available, enabling them to deliver services without pause. A software product can still cooperate with users even if it is down due to loose coupling and the modularity of microservices.
Fault-tolerant software systems can continue to operate when heavy loads are applied, such as when number of requests or big data volumes are dealt with on a web platform simultaneously. This makes it possible for users to carry out tasks — opening a bank account, conducting transactions, paying bills, generating an invoice — whenever they need to.
3. Ease of maintenance
Microservices architecture in banking can make infrastructure maintenance easier for financial services companies and reduce their infrastructure costs. They are autonomous and loosely coupled, services can be maintained if they are not linked.
This will make it easier for software developers to modify modules and add new functions. Monolithic applications have engineers rewriting large portions of codebase, which is significantly more time and money consuming.
4. Improved security and compliance
A financial institution that operates with extremely sensitive data like cardholder information, transaction details, and billing information needs to ensure the privacy and compliance of that information.
Payment Card Industry Data Security Standard (PCI DSS) and General Data Privacy Regulation (GDPR) both serve as examples of safety laws. Therefore, solving these problems as a starting point for a fintech company must be the top priority.
Banking software can be more secure and compliant if it uses a microservices architecture. By loose coupling, if software experts identify problems in a certain module, they can work hard on fixing them quickly, without affecting the rest of the system.
Development teams can use tools like Docker and Kubernetes to manage communication between and among services and monitor security. DecSecOps is another cybersecurity practice they use here at Surf to protect their software against different threats.
According to users, microservices architecture solutions are said to offer enhanced safety as one of their main benefits. IBM surveyed in 2021, in which 29% of respondents said that their data security has improved, while 26% have improved application security.
5. Facilitated deployment
As a result of microservices architecture, engineers can deploy components independently without deploying the entire platform again when adding new functionality. Consequently, banks can save time and money by automating the overall deployment process.
6. The ability to use a variety of technology stacks
Companies can avoid long-term commitments to a technology load using a microservices architecture for their banking software. Software experts can combine different coding languages, libraries, frameworks, and databases to develop different modules because services are loosely coupled.
A software developer can use new technologies when making substantial changes to a current component or setting up a service. Therefore, every case can be customized with the right tech stack.
Let’s look at a real-life example of Monzo to better understand how microservices architecture is used in banking.
An Introduction to Monzo’s Microservices-Based Digital Bank
Monzo is an online marketplace and bank platform that offers consumers a range of financial products and services. It is based in the UK. Over 20 rounds, the company raised $648.1 million since its founding in 2015. Currently, Monzo boasts over 40 million users and transacts a total of $1.38 billion a year.
Throughout the development process, the company’s goal was to design a highly accessible, fault-tolerant, and easy-to-use infrastructure. Monzo noticed consumers faced delays in accessing services and performing operations. In contrast to the previous requirement for client statements to appear 48 hours after a transaction, users can now observation their balances in real-time.
Monzo built an advanced microservice architecture solution based on Amazon Web Services (AWS) for its fundamental banking system architecture. The organization attained much improved agility and fault tolerance by using Kubernetes for application deployment and containerization. Monzo runs over 1600 microservices on AWS today.
What Surf Can Do to Assist You In Building A Microservice Architecture
Surf often recommends Microservice architectures to their customers due to their scalability, high reliability, and fault tolerance. Bringing new functionality, customizing solutions faster, and facilitating infrastructure maintenance allows organizations to decrease time to market and costs by improving deployment speed.
Their software experts have completed a wide range of banking, insurance, and hospitality projects. Their data security and ultimate compliance with PCI DSS and GDPR regulations are ensured by using the technology stack provided by cloud providers and the most up-to-date DevSecOps practices.
