Financial institutions face three enduring IT challenges: first, the maintenance and upgrade of legacy monolithic enterprise applications; second, the suboptimal behaviour of embedded third-party vendors in terms of slowness to upgrade functionality and the locking-down of any customisability; and third, the increasing workload arising from the digital transformation and electronification of most markets. This article looks at how low code, the next breakthrough technology on the technology continuum, used in concert with cloud, microservices and open-source technology, can be employed to not only alleviate the three main challenges faced by IT teams, but also reduce costs, improve the efficiency of developers, enhance the fitness of purpose of software and improve time from idea to production.

By: Rachel Lindstrom GreySpark Senior Manager
Low-code development is a form of rapid application development that gives users the option to use scripting or predefined code. To a degree, it automates development, generating code by calling on ready-made quick-to-assemble components to accelerate the production of software. The adoption of low-code technology is rising across the financial services sector, with one study suggesting that 65% of application development will be undertaken using low code technology by 2024. This dramatic increase may be a consequence of the already widespread adoption of a tri-vector of key synergistic technologies: cloud, open-source code and microservices architecture.
The evolution of technology, when viewed in hindsight, is highly dependent on the comparative readiness of symbiotic technologies. The birth of a new technology trend does not spring from nowhere, and the technology landscape can stimulate or stifle the development of new technologies. This truism is at the heart of the low-code technology story. While the technology neither evolved out of, nor is dependent on, opensource, cloud and microservices technologies, the comparative readiness and adoption of these technologies are acting as catalysts propelling low-code technology into the collective consciousness of innovative technologists.
In this article, GreySpark Partners outlines the evolution of the three synergistic technologies and interweaves the journey of low-code technology, describing its uses and importance for software development in financial firms today.
Technology Megatrends
Over the last decade, financial institutions adopted cloud technology, open-source code and microservices architecture tactically, rather than strategically, across their organisations, but the increasing rate of adoption of each is well-documented, and offers potential benefits around cost reduction, efficiency gains and increased scalability, and used, in combination, they can be extremely powerful.
Megatrend 1: Cloud Technology Adoption
In 2022, financial institutions are wholeheartedly embracing the various incarnations of cloud technology as a remedy for the increasingly numerous problems they face from their continued use of heavy legacy on-premises software stacks. Essentially, cloud technology reduces the IT footprint of a firm by offering some form of a managed service – be that a managed application, platform, or infrastructure – all hosted in one or more third-party datacentres. Financial services firms adopting the Software-as-a-Service (SaaS) approach are effectively outsourcing specific aspects of the software lifecycle, that can include the hosting, maintenance and/or management of the software to a cloud service provider.
In the early days of cloud adoption, lowering operating costs was a big driver for financial institutions and pay-as-you-go pricing models scaled costs with the amount of use made of the cloud application provider’s service. However, a range of additional benefits quickly took shape (see Figure 2). Capital expenditure is lower for the cloud service as the provider operates and maintains the software and hardware outside the financial institution. Where software is hosted in the cloud, firms may also benefit from operational efficiencies, as the cloud model typically simplifies financial firm workflows. In addition, the adoption of cloud platforms can lead to increased levels of process automation and the deployment of new services, including backup and recovery services.
The automated deployment of servers, processing power, storage and networking that cloud technology facilitates can satisfy evolving solution architecture and business needs, and firms can flex storage and processing power without carrying the burden of managing the underlying infrastructure. Time-consuming hardware procurement is removed from deployment timeframes in financial institutions. Additionally, regular software updates, including security patches, can be carried out by cloud providers, such as AWS, Microsoft Azure and Google Cloud, which provide some of the most secure software environments. Firms taking the cloud approach find that making upgrades and ongoing maintenance are often considerably easier.
Megatrend 2: Modernising Software Stacks from The Ground Up
Prior to the advent of microservices architecture, monolithic software applications were the norm in financial services firms. These applications were ‘monolithic’ in that the user interface and data access code were combined into a single program hosted on a single platform. Traditionally, the application code was heavy to run and was hosted on servers owned and maintained by the financial firm. The single codebase made monolithic software applications tricky to patch and even small changes required the redeployment of the whole application code base.
Microservice architecture converts monolithic software into a set of small independent components that run independently of one another, and communication between these ‘microservices’ is handled via API. The microservices and all their dependencies (such as libraries) can be bundled into a ‘container’, which allows the application to be deployed regardless of the underlying environment. The microservices architectural approach creates software that is more reliable, performs better and has greater resilience. As each service can be encapsulated, developers are able to tweak or even upgrade specific microservices seamlessly, without affecting other services. Software developed in a microservices architecture lends itself to the DevOps methodology of Continuous Development / Continuous Deployment (CICD). This flexible approach has meant that, in 2022, microservices architecture is the de facto approach used to develop new applications, and the architecture is supported by most cloud service and technology providers.
Cloud technology, with its ability to seamlessly handle infrastructure scaling and the dynamic allocation of resources is the perfect host environment for microservices-architected software developed using the DevOps methodology, as it can make both development and operations teams more efficient. If microservices-based deployments in the cloud are supported by modern DevOps principles, the timeline necessary to have a fully operational platform can be reduced to minutes. The combination of cloud technology and microservices-based applications offers financial firms myriad benefits, the impact of which can be felt by users across the business, as it effectively eradicates the issues posed by legacy monolithic enterprise applications (see Figure 3).
Megatrend 3: Exposing Open-source Code in Technology Provider Offerings
Many key enterprise platforms and applications have been acquired from vendors that dominate that technology space and, consequently, their products can lack flexibility. Open-source projects began with the creation of new operating systems and databases, and developers collaborated to write the software; specifically, to break the hold that a few technology vendors had on customers of those products. Through a loosely knit governance model, developers added, improved and enhanced the open-source code. The breakthrough for open-source software came when it began to be incorporated into software developed by technology product vendors. While the core software was not accessible by the user, part of the code was exposed allowing firms to configure the software product for their own purposes.
Making use of the microservices architectural approach to develop software using open-source code and then deploying, operating, maintaining, testing and upgrading it in the cloud can address many of the issues firms faced when they relied on legacy technology stacks. Most significantly, it allows firms to build software that is designed and built to be 100% fit-for-purpose (see Figure 4). It neatly avoids problems that can arise at the end of a product contract period, when a vendor can alter the terms and conditions to be less favourable to the financial firm, and it ensures that the software matches the product requirements perfectly.
The Next Generation Low-code Platforms
Developing applications from scratch can incur significant time and costs for firms, however, and this is where low-code technology can be used to great effect – especially where it leverages cloud, microservices and open-source technology. To understand why low-code technology adoption has increased in the last few years, it is worth looking at its evolution.
Early low-code tools began to be used by developers in the 1980s and 1990s to meet the need for in-house software in the increasingly electronic world of financial services that was almost devoid of third-party applications. These tools were limited, however, because they could not handle large volumes of streaming data. The next generation of low-code technology tools were designed for building cloud-native software using opensource code exposed to developers and were more capable of handling large volumes of streamed data. Consequently, they were more eligible for use in financial institutions. However, although this new generation of low-code tools had components that could be used to quickly build applications, they did not include financial services-specific components.
In financial firms, there are industry-specific components that are continuously incorporated into software time and again. Thus, low-code platforms that incorporate tools purpose-built for financial services are able to save developers in financial firms significant time and effort. Using these tools, developers can lean on pre-existing software components to facilitate rapid development of even the most advanced financial services specific applications. The level of customisation that these tools offer can be significant and bespoke applications can be more easily created and put into production in a fraction of the time it would have taken to build them from scratch. Therefore, when choosing a low-code platform, financial firms should examine the number and range of industry-specific components included in the product.
Third-party applications typically provide features with limited customisation, and it is here that low-code platforms have another advantage; they can be used by developers to combine low-code components, including custom inhouse-built components, and integrate with third-party applications. This allows developers to focus on the coding up components that have high business value and provide the firm with a differentiating factor.
With a low-code solution, the blueprint of a scalable, repeatable, flexible, secure platform can be achieved in a reduced timeline. From a proof-of-concept configurable graphical user interface to a fully-fledged platform with core functionalities, developers can expend less energy on coding that is generic, whether that be for a service, a connector or an adapter, and more time on how the platform should be built and to what end.
Enhancing Development in Financial Firms with an Orchestra of Technologies
Technology innovation has been central to the success of financial institutions for decades and the pressure to innovate has never been greater as they strive to stay ahead of competitors, thwart encroachment from fintechs, keep pace with changing regulation and control costs. Transforming technology infrastructure to make it more scalable, efficient, nimble and customised were drivers behind the industry-wide acceptance of cloud, microservices and open source.
The next step for firms on this journey is to optimise the way they write their software. To enhance their efficiency, developers need modern tools that accelerate their capabilities. Low-code technology components can be assembled by developers to rapidly build bespoke applications that rest on a raft of standardised features, allowing them time to focus on proprietary components that have high business value. Success for financial firms lies in assembling an orchestra of technologies, each of which provide symbiotic benefits. As the electronification of trading has moved software front and centre in the financial enterprise, it is time for low-code technology to take the first chair in that technology orchestra.
Genesis Global provides freedom from legacy and replaces the buy vs. build challenge with a buy-to-build solution. Purpose built for financial markets organizations, the Genesis low-code platform powers application development with the speed, performance and flexibility these organizations need to gain a sustained competitive edge. With highly composable and customizable components, development teams can accelerate innovation today while scaling for tomorrow.
Whether it’s extending the capabilities of legacy applications or building brand new apps or platforms, Genesis supercharges developers with reusable components, dev tools, and documentation. Built with modern technologies and an event-driven architecture, the platform can handle the performance and scalability needs of the world’s premier financial markets institutions.