Paulina Twarogal
Marcin Dobosz
The financial sector operates at a unique pace where security, stability, and regulatory compliance are crucial for maintaining customer trust and financial integrity. Given this focus, some may question whether DevOps, known for its emphasis on agility and quick changes, aligns well with these priorities. Well, with its emphasis on collaboration and automation, DevOps offers immense potential for banks.
In fact, over 80% of financial services companies have already embraced DevOps practices, including major players like Bank of America, Barclays, HSBC, and Santander Bank. This widespread adoption underscores its relevance across the industry. Yet, making it work effectively poses some challenges. What are these challenges, and what is DevOps in the banking sector really about? Read on to find out.
What is DevOps?
Is DevOps just a tool, or does it resemble agile methodologies like Scrum or Kanban? And if you’re using Kubernetes for deployment, does that automatically mean you’re practicing DevOps? Where does it even begin, and how do you know when you’ve fully embraced it? The truth is, DevOps can mean a lot of different things, depending on who you ask. This makes it somewhat complex, especially when considering that some “old-school” roles (such as sysadmin or network admin) simply transition to DevOps titles without a true shift in mindset and practices.
DevOps can be defined as a powerful approach that combines tools, practices, and a collaborative mindset. It automates and integrates the work of software developers and IT operations teams. This focus on teamwork, clear communication, and automation helps deliver software faster and more reliably. DevOps gained traction by encouraging teams to break down tasks, work together, and see the bigger picture. This transparency leads to faster, more reliable deployments.
The idea behind DevOps emerged around 2007. Back then, software development and IT operations often worked in isolation. Developers wrote the code, while IT operations handled deploying and maintaining it. DevOps—a blend of “development” and “operations”—bridges this gap by integrating these disciplines into a single, continuous process.
However, it isn’t a quick fix for everything. It’s not a readily available product or tool that can be implemented with a one-time effort. Moreover, it’s not the sole responsibility of a single engineer, nor is it just a change in job titles for existing development teams. While embracing Agile or Scrum methodologies can be complementary practices in a DevOps journey, they aren’t synonymous with achieving a DevOps environment. DevOps is much more than any of these things.
DevOps in the banking sector: How can it make a difference?
Truth be told, back in the day financial institutions weren’t exactly known for embracing change. This cautious approach is understandable, though. Implementing any innovation in this sector requires navigating a complex web of regulatory requirements, especially those around data security.
However, the world of finance is constantly evolving, and customer expectations are higher than ever. To maintain a competitive edge, financial companies must be open to transformation. Fortunately, this shift is underway. Over 80% of financial institutions are recognizing the value proposition, and are actively adopting DevOps practices. This is a clear sign that the financial industry appreciates the efficiency gains DevOps brings to software development and operations. Following this trend, the global financial services DevOps market (DevOps software solutions and services) is expected to grow significantly, reaching a projected value of $25.5 billion by 2028.
The benefits of implementing DevOps practices
Today, some of the major players in the banking industry like Bank of America, HSBC, Barclays or Santander Bank are adopting DevOps practices to reap a range of benefits. What benefits are there?
- Faster time to market: DevOps streamlines the software development lifecycle, allowing banks to deliver new features and products to customers quicker. With this agility, they can stay more competitive.
- Enhanced security: DevOps emphasizes security throughout the entire development process, not just as an afterthought. This proactive approach, often enhanced by artificial intelligence solutions, helps banks minimize security vulnerabilities and protect sensitive customer data.
- Improved collaboration: By breaking down silos and setting common goals and duties, DevOps fosters a culture of collaboration between development and operations teams. The result? Effective communication, reduced friction, and streamlined development process.
- Improved operational efficiency: Automating repetitive tasks reduces manual work and streamlines operations. With a well-functioning DevOps approach, organizations can achieve cost savings and a more efficient use of resources.
- Increased reliability: DevOps practices like continuous integration and continuous delivery (CI/CD) allow for frequent and controlled deployments. As a result, bugs can be identified and fixed faster, leading to more reliable and stable applications.
The biggest challenges of DevOps in banking
While the benefits of DevOps are clear, implementing it in the banking industry presents some unique challenges that need to be taken into consideration.
Legacy technology
Established banking institutions often rely on legacy core banking systems. These systems, developed years ago, or even decades back, are complex, inflexible, and designed for specific functions. Built on outdated languages, databases, and hardware, they lack the flexibility and scalability needed for modern development. Thus, integrating them with newer systems can be challenging.
This lack of agility hinders innovation. Rapid development and deployment of new features becomes difficult, potentially causing banks to fall behind evolving customer demands. A study reveals that 44% of financial professionals struggle with integrating new technologies due to legacy systems, highlighting the industry-wide challenge.
Security and strict regulatory requirements
Banking is also a heavily regulated sector, with strict compliance requirements that are non-negotiable. After all, customer data security is paramount, and cyber threats are a constant concern. This, however, significantly impacts the adoption of DevOps. Integrating strict compliance standards into the development process can pose challenges.
For instance, regulations like PCI DSS (Payment Card Industry Data Security Standard) and GDPR (General Data Protection Regulation) add layers of complexity. DevOps must ensure all code changes, deployments, and infrastructure configurations adhere to these ever-evolving standards. Without careful implementation, this can lead to a slower development lifecycle.
Implementation costs
Some organizations might see DevOps as a way to cut costs, but that’s not its main goal. The true power of DevOps lies in its ability to unlock revenue growth by enabling your organization to deliver greater value to customers.
However, implementing DevOps effectively does require dedicated resources and budget. This includes new tools, training for your team, and potentially even upgrades to your existing infrastructure. Engaging a DevOps team can be highly beneficial in this initial phase. Their expertise can help estimate the total budget needed for a complete transition and make sure everything goes well.
So, there’s potential to reduce costs in the long run, especially in terms of lower maintenance costs after full implementation. But it’s important to take all the potential costs mentioned above into account at the very beginning of the process.
Adoption and integration of new tools
A common pitfall for companies adopting DevOps is focusing too much on the tools themselves. Many companies mistakenly believe DevOps is simply about having the right software. However, the real key lies in fostering a culture of collaboration and communication between teams. This approach can lead to tool overload, creating a complex and confusing environment for teams.
To truly benefit from DevOps, your teams need to embrace the challenge of selecting the right tools for development, testing, and deployment. These tools need to work seamlessly together as a unified system. Choosing the right DevOps tools, however, can be tricky because they need to be secure and fit well with your existing systems. Plus, businesses need to train your team on these new tools so they can use them effectively and stay productive.
Skills gaps
DevOps requires a unique blend of development, operations, and automation expertise. Many traditional banking institutions may lack employees with the necessary skills to fully embrace this new approach. This can cause problems with selecting tools, automating configuration, and integrating DevOps practices with existing workflows.
To address this challenge, banks can invest in training programs to equip their existing staff with the necessary DevOps skills. Additionally, attracting talent with relevant experience from other industries that have embraced DevOps can be a valuable strategy.
Cultural shift and communication
One of the biggest challenges organizations face with DevOps is getting people on board. Transitioning to DevOps requires a significant shift in the IT department and company culture, which can be uncomfortable for some employees. This resistance can manifest in several ways, from reluctance to learn new tools and processes and unwillingness to collaborate with other teams to a general aversion to acquiring new skills.
While change is crucial for growth, it can be unsettling for those used to doing things a certain way. The key to making DevOps work is taking it slow and steady. Only then DevOps principles can be smoothly ingrained in the company culture.
Problems with the right standards and metrics
Another significant hurdle for DevOps adoption in banking is the challenge of establishing a unified set of metrics and parameters for success. Traditionally, Dev and Ops teams have operated with distinct goals, working systems, and even toolsets. This can make integrating their tools and finding common ground for measurement a tedious process. To overcome this, teams must agree upon a mutually beneficial set of metrics.
Unlike past IT initiatives where success might be narrowly defined by cost reduction, DevOps success in banking requires a more holistic approach. The parameters for success should be established by seasoned experts who can quantify the true value delivered to customers. This value could encompass factors like faster time-to-market for new financial products, improved customer experience through digital channels, and increased operational efficiency. By focusing on these broader metrics, banks can ensure DevOps adoption truly benefits the organization as a whole.
How can Neontri help you?
Implementing DevOps in banking can be daunting due to legacy systems, strict regulations, and skills gaps. At Neontri, our expert banking software development services are designed to tackle these challenges head-on.
Our DevOps services can help you achieve faster and more reliable software delivery. The team of DevOps experts is dedicated to providing tailored solutions that fit your business needs. Neontri’s certified experts handle the entire process from automating infrastructure to deployment and continuous monitoring. End-to-end solutions are designed to over every aspect of building and managing your DevOps pipeline.
Final thoughts
Although DevOps brings many advantages to banks, its implementation in the financial sector requires careful attention to the challenges unique to this industry. From the legacy systems to skills gaps and the need for robust metrics, banks must navigate these hurdles to fully unlock the potential of DevOps.
FAQ
What metrics should be used to measure the success of DevOps in banking?
DevOps in banking can be measured by deployment frequency, lead time for changes, and mean time to recovery (MTTR). These metrics demonstrate the speed and quality of delivering new features or fixes while keeping the system stable and secure, which is crucial in banking.
How does DevOps contribute to the innovation and development of new banking products?
DevOps drives innovation in banking by accelerating and enhancing the delivery of new features through automation and continuous integration. This approach allows banks to develop and release products more efficiently, meet customer needs without compromising security or compliance.
