PaaS and the Disruption of the Financial Tech Industry

A number of companies from the financial services industry are looking at Cloud Foundry or already have production deployment of Cloud Foundry. Why is the deployment  and uptake of a platform, particularly strong in Financial Tech ?  The reason is that this is an industry that is in a fervor of disruption and disaggregation. The incumbents have taken notice and are coming to the battle with guns drawn. Take a look at this picture.

http://fermi.vc/post/72559525330/disaggregation-of-a-bank

As we look at the future of  enterprises with CF, as senior consultants and technical leaders it behooves us to paint a picture of the future. For a look at the ideal digital future of this kind of platform driven transformation you need to look no further than the European bank ING who is undergoing/underwent a complete digital transformation. ING CEO Koos Timmermans spoke at the Goldman Sachs European Financials Conference in Rome on June 16/2015. Take a look at this slide deckhttp://www.slideshare.net/ING/goldman-sachs-16-june-2015 in particular slides 6 and 9. Note ING used a home-grown PaaS and not CF. To quote Koos from the slide deck - 

Investment of EUR 200 mln to further simplify, standardize and automate IT: • Decommissioning 40% of application landscape • Moving 80% of applications to zero-touch private cloud.

I also really enjoyed the following four part series from ThoughtWorks where the authors share their experiences and insights on ushering tech. fueled innovation in incumbent financial services organizations.

1. http://www.thoughtworks.com/insights/blog/innovation-eating-consumer-finance
2. http://www.thoughtworks.com/insights/blog/great-financial-services-companies-deliver-products-not-projects
3. http://www.thoughtworks.com/insights/blog/winning-companies-master-strategic-technology
4. http://www.thoughtworks.com/insights/blog/how-practice-continuous-innovation
5. http://radar.oreilly.com/2015/05/finance-transformation-oreilly-next-money.html

Much of what these articles state we already know; however the information is provided in the context of the financial tech industry and peppered with customer names/ case studies. These articles propose looking at all IT through a bi-modal view - Strategic and Utility IT. Thereafter they propose running strategic IT via a LEAN methodology in an innovation lab

• Shift from a project mentality to a product paradigm
• Break down large-scale, high-risk product development efforts into smaller, low-risk experiments.
• Provide these teams with the budget discretion to quickly test multiple ideas in parallel.Teams have toc learly define the problem and identify appropriate metrics to measure success.
• Collaborate early and often with stakeholders from technology, business, marketing, advertising, product, etc.

To achieve this transformation Banks have to affect both technical and cultural change

Cultural Change

• Pivotal Way - Agile development with pair programming, TDD, Open Cloud Platform
  • From Silos to building shared toolsets, vocabularies, and communication structures in service of a culture focused on a single goal: delivering business value
  • Focus on open code and tooling across AppOps and InfraOps
  • Punctuated Equilibrium to Continous Delivery
  • Centralized Governance to Decentralized Autonomy
  • Business Capability Teams - cross-functional teams that develop products rather than projects & Site Reliability Team

Technical Change

• Containerization
• Cloud Native Microservices  Architectures - Systems designed with the fallacies of distributed computing in mind, Mobility, API-based collaboration, Patterns that optimize for speed, safety and scale, Self-service agile Infrastructure
• Strategic vs Utility IT
• Strategy For Legacy apps
  • App Decomposition Best Practices
  • Decompose Monoliths
  • Decompose Data