In times of ubiquitous digital transformation in combination with dynamically changing requirements from the market and customers, aspects such as agility, flexibility, and speed are essential in IT. From a technological point of view, there is hardly any way around containers and microservices architectures. This particularly affects the financial sector.
From development processes to infrastructure: IT has changed rapidly in recent years. Since cloud transformation has come to the fore as a promising strategy for a successful future, the use of container technologies and microservices architectures has become increasingly relevant. Financial institutions in particular can benefit from container technologies to modernize themselves and stay on par with fintechs, as their historically grown legacy systems often hinder the flexible development of new solutions.
Many banks are therefore restructuring the processes and technologies of their IT departments. A containerized infrastructure can help financial institutions achieve their goals in terms of speed, scalability, and security. This means that business models and business processes can be digitized faster and meet the requirements of IT for reliable, scalable applications, which can be updated faster, ultimately leading to a better customer experience.
Container – The Transport Unit for Software
In IT, containers are self-contained, standardized units for software that simplify the transport and installation of application data. The container accommodates everything an application needs to be able to run. This enormously simplifies the development, transport, and deployment of software. The application can thus be easily moved between environments and then run without adaptions. This eliminates the runtime problems in different environments that frequently occur without containers and which software developers like to respond to with a shrug and the statement "It works on my machine".
The concept of containers has been around for quite a while. Since 2013, for example, the open-source software Docker has been enjoying increasing popularity – it is a software for container virtualization that enables the creation and operation of containers. As more and more companies also use cloud solutions, containers have become more important in recent years, because the new hosting options also contribute to an increasingly heterogeneous IT. The result is often a mixture of local applications and applications that operate on hybrid, public or private clouds. Container solutions make it possible to provide software quickly and flexibly across heterogeneous and distributed environments including the cloud and, if necessary, to move to another infrastructure.
Container Technology Promotes Productivity
Development teams can benefit from container technology during application development. Containers act like virtual machines (VMs) – both make applications autonomous from the environment in which they are executed. The difference: a VM contains a full-fledged operating system plus applications, and additionally requires a hypervisor – that is, software that executes the VM. Containers, on the other hand, operate on the basic operating system (container host), isolated from other containers. This saves memory and computing capacity and ensures that resources can be used more efficiently.
Containers also represent a paradigm shift in how technology connects two core IT functions that were often performed separately in the past: development and operations. Because software is transported in containers as a closed, executable unit, software developers and operational IT teams spend less time troubleshooting and balancing the differences between the development, test, and production environments. This creates a closer link between development and operations and paves the way for establishing a productive DevOps culture. The 'application packaging' also facilitates the automation of the deployment process, which can accelerate software tests and updates.
This optimized way of working significantly shortens the release cycles for the software, which reduces the time to market and provides a clear advantage in the increasingly competitive financial services market.
Containers Enjoy Company: Why Orchestration is so Important
The stable operating behavior of their applications is not the only important aspect for financial institutions; what is more, a scalable application infrastructure is fundamental, especially for expanding banks, because it enables them to react flexibly to market requirements. A growing number of users also calls for increased IT performance. Containers can be provisioned as required via container orchestration platforms such as Kubernetes. If the workload increases and a larger number of containers is required, these can be generated and made available very quickly and, above all, depending on the current load. As a result, the IT performance remains stable even under high loads and many accesses.
In the financial industry, however, there are particularly high demands on the security and availability of applications, which an open-source project like Kubernetes alone cannot achieve. This is where OpenShift comes in. An OpenShift container platform enables the professional distribution of containers and the operation of hardened Kubernetes clusters. In addition, the platform contains many features, both for development and for operations, which support automation from development to monitoring. That is why OpenShift plays an important role as an application platform for containers in the financial sector, because not only day 1 operations in the software lifecycle, that is, development and installation, but also day 2 operations, the long-term operation of the software, must be taken into account.
Containers and Microservices Enable Modular Banking IT
However, the world often looks very different inside banks. In many cases, there are rigid legacy IT systems that can hardly meet the dynamic requirements of regulation, technological progress and, last but not least, multifaceted customer requirements. Consequently, the monolithic systems become more complex with every new feature, and implementing and testing new functions is becoming increasingly extensive.
To reduce the complexity in banking software and simplify projects, modular solutions are the perfect fit. Microservices are the ideal technological basis for this – and containers provide the optimal packaging for microservices. With the help of a loosely coupled architecture consisting of modular microservices connected by interfaces (APIs), legacy systems can be modernized step by step. With a gradual approach, each function of the old system is incrementally outsourced to an individual microservice. The boundaries of these microservices should be defined from a business point of view, for example following the principles of domain-driven design. If each of these microservices is provided as a container, this consequently leads to a large number of containers. As a result, the management and orchestration of such a modular system require a clear structure.
Technology is becoming a crucial tool for banks. To keep up with increasing demands, today's financial institutions must become tomorrow's technology pioneers. Containers and microservices can be important cornerstones of this extensive transformation: With a future-proof IT infrastructure based on state-of-the-art technologies, new services can be provided more quickly, and time and costs can be saved through faster development processes.
A Kubernetes-based container architecture can reduce complexity, offer higher application reliability, and result in more flexible horizontal scalability across the entire back-end infrastructure. Last but not least, the customer benefits from 24/7 access to applications and data as well as from the rapid provision of new functions and important updates.
But this requires new technical skills that are not yet sufficiently existent in many banks. Only a platform that combines all of this, concentrates on business functionalities, and at the same time makes new technologies such as microservices and containers available, enables banks to democratize their IT and implement digitization projects quickly but, above all, securely.
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