The financial technology (Fintech) industry has grown tremendously in recent times. In the past, Fintech firms used open source components to run data centers and build products. They have reaped multiple benefits from this, including reducing costs and providing flexibility for their businesses. Banks can also use open source software (OSS) in their enterprise architecture. They can consume or contribute to OSS or even publish internal projects as OSS (Aitkens et al., 2018). By leveraging OSS in its enterprise architecture, banks will stimulate innovation, operate more cost-efficiently, and attract better talent.
Banks can utilize OSS as consumers either internally or externally. Consuming open source means using open source components in a bank’s applications or facilities. OSS may be used internally on personal computers, routers, and servers. (Aitken et al., 2018) The use of open source code facilitates the completion of tasks using free software. For instance, many banks now use OSS, such as Java, R, and Python, for their needs. Utilizing existing software saves on funds that would have been used on software licensing and consultation. It also allows banks to roll out products in a timely manner since OSS is freely and readily available. In general, banks can be consumers of OSS.
Banks can also incorporate OSS in their enterprise architecture by contributing to the software. When using OSS, developers may identify and fix bugs. Fixing a bug helps a code work better for the developer’s current needs and other people in the future. The bank developers can also patch security vulnerabilities by altering the source code. Instead of building new patches for each task, Fintech developers could modify existing codes, thereby contributing to their improvement (Lochy, 2020). This is advantageous to the bank because it saves time and cost. Additionally, it positions banks as drivers of innovation rather than simply consumers of the final product. It also increases the bank’s reputational capital because contributing to open source code improves its public image. It also enables a bank to keep up-to-date with new features and security updates.
Another way in which banks can use OSS in enterprises is by opening their proprietary software. It entails making existing software available for anyone to use, modify, and distribute. Most banks are reluctant to publish internal software as open source. This is because it is risky since it exposes the codes to public scrutiny. Banks also fear that this move will decrease their competitive advantage over others in the industry (Lochy, 2020). Despite the risks and fears associated with open sourcing proprietary software, the benefits accruable are worthwhile. For instance, the top talent in the industry might be attracted to a bank after viewing its software (Aitken et al., 2018). It is essential to note that not all software should be made publicly accessible. Banks should approach open sourcing with caution after analyzing possible hazards and benefits.
In summary, banks can utilize OSS in their enterprise architecture by using or contributing to existing open codes or opening their own software. The simplest way is using OSS, while the most complex is opening their source codes. By joining the open software trend, banks stand to gain in multiple ways. They will reduce expenses incurred on developing new codes and consulting market experts. They also save on time that would otherwise be spent building a patch from scratch. Overall, banks should cautiously embrace the use of open software sources.
References
Aitken, A., Hawthorn, L., Williamson, A. (2018). The business value of the open source for financial services firms. FINOS Fintech Open Source Foundation. Web.
Lochy, J. (2020). Banks are finally embracing the Open Source movement. Finextra. Web.