By Alessandro Petroni, Director of Financial Services Strategy, Red Hat
When you hear the term “containers” in today’s day and age, your mind probably does not immediately think of large standardized shipping vessels, designed and built for freight transport across different modes of transport — from ship to rail to truck. Instead, and especially if you work in technology, you are more likely to think of Linux container platform technology and how it can help to bridge the gap between the developer and operations teams so they can create and deploy applications more efficiently, by packaging and isolating applications across operating environments, from development to production.
However, you may not be fully aware of all of the benefits that containers can bring to the financial services industry. Containerization can provide an optimal path for institutions seeking to decrease risk, improve developer efficiency, deliver cost savings through increased agility and time from idea to production.
Okay, but what are containers exactly and why can they be important to the financial services industry?
Linux containers are technologies that allow you to package and isolate applications with their entire runtime environment—all of the files necessary to run. Application independence from the underlying operating environment is key since environments (development, UAT, production) can then be standardized and automated, helping to lower cost and operational risk. Containers can allow multiple teams to run applications in a controlled and isolated environment from each other on the same shared infrastructure, without interfering with one another.
The financial services industry can be considered an early adopter of virtual machines (VMs), likely enticed by the lower capital costs, greater security and increased ease of administration. While containers won’t replace virtualization, they can increase VM and server utilization. Linux containers are based on open source technologies, which can help to increase the pace of innovation, and can allow for greater computing density at a lower cost.
Many Linux container operating platforms have been engineered and certified by companies like Red Hat to run in a variety of environments, including on-premise, private, public and hybrid cloud. This flexibility enables users to keep up with business demands, while helping to support greater innovation to enable competing when there is pressure from more nimble digital players.
Containers can hold a promise of delivering real IT transformation for the financial services industry, in part due to the potential for a more rapid pace of application development that can be provided by containers and the standardization of the container platform. However, in order to achieve successful adoption, teams must work together, beyond IT operations and receive detailed input from multiple organizations, working together. Successful container adoption depends on people and process as much as technology. When teams work together in this way, this can enable them to innovate at the pace in the ever-evolving financial services industry
And, we’ve been seeing this evolution for a while now. As far back as 2015, BBVA chairman Francisco González told of the bank’s transformation to become a software company of the future. This disruption in the way the industry is run can be considered one of the greatest risks and simultaneously, can be considered one of the greatest opportunity for the financial services industry as a whole. I feel that keeping on top of the disruptions will be critical for the financial services industry as it moves into the future.
I get why they would be nice to have, but can a highly regulated industry like financial services successfully introduce them?
The US Office of the Comptroller of the Currency (OCC) has stated that “strategic risk remains high as banks consider business model changes and face challenges in growing revenue.” Strategic planning remains important as banks adopt innovative products, services and processes in response to evolving demands for financial services and the entrance of new competitors, such as out-of-market banks and financial technology firms’. In my opinion, financial institutions may be remiss in not embracing technologies like containers and transforming into a financial technology organization (or seriously challenge other financial services institutions that may not have the latest technology in place). Open source technologies have sought to participate in creating an environment of more rapid technological advancements at a lower cost, helping to reduce the barrier to entry.
However, with or without new technologies, the fact remains that traditional financial institutions are governed by regulatory and compliance requirements. While driving technology innovation, turning to trusted technology partners and providers to help introduce introduce DevOps, container platforms and agile best practices can help FSI institutions to transform their own IT departments to disrupt the market.
For example, Barclays Bank introduced an application Platform-as-a-Service (aPaaS) as part of its cloud program. The company used Red Hat OpenShift Container Platform as an update to its IT infrastructure to help provide an agile, DevOps driven approach to application creation. This allowed developers to have access to necessary resources on demand and at a self-service pace. The result of amping up Barclay’s IT infrastructure to include containers resulted in a faster release update schedule that has freed up developers to work on fresh, innovative tasks rather than everyday, administrative tasks that do not provide competitive value. Barclays’ culture has also evolved to be much more agile, allowing the IT organization the room to try (and sometimes fail at) new initiatives.
The technical details of containers
When it comes to containers, a container orchestration platform offers developers a common language for enabling business value while also enabling operations teams to work with a common platform, helping to simplify and reduce the costs of regulatory compliance. This can be thought of as delivering a common environment between the development and the operations teams — DevOps.
Using container orchestration can make the standardized data center a tapestry woven of more simple, loosely-connected components, each with a considerable amount of elasticity, to help the enterprise more quickly build and test new ideas that may have been unsupported in the previous environment. With containers, developers and operations can now “speak the same language” to better provide common goals, strategies and ideas that can help take enterprise innovations to the next level. Containers and orchestration platforms can help financial institutions can get ahead of the competition and deliver disruption to the industry, rather than be the ones being disrupted.
While containers may seem complex, partnering with the right software organization to help with the implementation can take the pressure off and help to get it done correctly. Containers offer a flexible and more secure and stable environment to help bridge the gap between operations and developers to help give organizations a leg up over the competition and ability to innovate for the future.