Five Software Development Challenges In The Financial Industry

The investment in new technologies within any industry will have its challenges. In this article, we'll take a closer look at the financial industry specifically. Over the past few years, there's been an exponential increase in the adoption of cloud technologies, SaaS and modern tooling that stems from a desire by many large financial institutions to remain at the top of their game. 

They know that if they stay on old legacy systems and provide poor web experiences, they will be disrupted by newcomers to the space. However, this comes with some key challenges:

1. Data Security

The vast amount of sensitive data and information (and how profitable that data and information can be) makes the finance industry extremely vulnerable to breaches and theft. Ensuring that this data is kept safe and that none of it is stolen or manipulated or any production servers are compromised is a significant challenge that needs to be worked on constantly in order to combat the threat.

One of the main solutions is to embrace DevSecOps. What better way to protect the data than to involve the developers who wrote the code? There are also many automated tools available to help software developers monitor and fix security vulnerabilities in their code. R&D managers need to ensure that the tools they're using allow them to control the data flow, redact sensitive data and explore the mitigation efforts the vendor is using to deal with sensitive data. Make sure these tools have role-based access control (RBAC) and have relevant certifications such as SOC2.

2. Legacy Systems

Financial institutions, like many other long-standing industries, have legacy systems that are foundational to core business applications. One of the main challenges is that these systems pose a security risk. As they become more and more outdated, they fail to efficiently support new software solutions. On the other hand, while it may seem like an easy alternative to simply replace them with more modern systems, it isn't that straightforward.

Many software providers understand it's not reasonable to expect large institutions to change their architectures overnight. They provide solutions that, for example, work both on-premises and in the cloud. Financial institutions need to seek out software vendors that understand the complexities of migration and are willing to help.

3. Cloud Adoption

As noted in the point above, financial services have traditionally been on-prem. However, in the modern and pandemic-stricken world we find ourselves living in, there's a big movement toward modernization across all industries. This modernization means that legacy systems are being left behind in favor of cloud, containers, microservices and Kubernetes.

Unfortunately, embracing new technologies is not quick and simple. Digital transformation can take anywhere from two to five years. The truth is that as much as "cloud is the future," there are millions (billions? trillions?) of dollars that rely on legacy infrastructure. It is neither smart nor advisable to transfer all that over to modern systems, which will inevitably break.

At the end of the day, financial institutions should hire top engineering talent to help them with this problem. We've seen, for example, the benefits of Capital One embracing the cloud, even being present at marquee tech events like AWS re:Invent. It's important to understand where the future is headed and remain ahead of the curve but to do so intelligently and safely.

4. Debugging

There is a lot of pressure and responsibility that lies with developers in the finance industry due to the sensitive nature of the data involved. There is a tremendous amount of risk management and compliance that needs to be instituted, which can make the job of a developer even harder. When it comes to debugging applications, we know that a software bug can immediately translate into a loss of money in this industry.

This is made even more challenging by the fact that developers find themselves debugging a spectrum of environments, everything from monolith to distributed to microservices. This makes resolving issues extremely difficult and troubleshooting applications quite expensive. When debugging critical applications with complex architectures, many hours of developer time and almost $300 billion are wasted per year.

There are modern debugging solutions on the market that let you live debug applications on the fly, regardless of the environment. The ability to debug applications on-prem and in the cloud, the same as if they were on your laptop, is crucial to developer success and productivity.

5. Digital Transformation With Covid-19

Covid-19 turned the world upside down. Many institutions were already transitioning away from legacy systems toward modern systems, and the new reality forced them to stop and reassess. Physical branches closed, employees went remote, and mobile services became a priority.

But what ended up happening, based on a vast amount of survey data, is that the pandemic ultimately increased the velocity of digital transformation. Businesses that had been slow to modernize now needed to do so quickly. Internally, that means adopting modern communication methods like Slack and Zoom. Externally, it means providing customers with a digital experience that meets users' needs and standards as if they were visiting a physical branch.

Dealing With The Challenges

When figuring out a solution to a challenge — whether it be preventing sensitive information from being stolen, debugging different architectures, moving toward modern software or continuously adapting to new circumstances — it's imperative to have the proper tools to do so.

Finding solutions that bridge the gap between the old and new worlds is a great strategy for engineering teams within the financial industry. Your boss may not approve of moving that business-critical application over to AWS overnight; however, by being methodical and strategic, leveraging tools that are capable of handling hybrid environments, it's only a matter of time before the financial industry becomes completely modern.

Article source: https://www.forbes.com/sites/forbestechcouncil/2021/02/03/five-software-development-challenges-in-the-financial-industry/?sh=479f562827f3