Editor's note: Financial institutions that utilize microservices will have the ability to divide large systems to improve modularity and increase flexibility and functionality.
Microservice-based software is growing in popularity within the financial services industry. In fact, the microservice architecture market is expected to reach $32 billion by 2023, according to the Microservice Architecture Market – Global Drivers, Restraints, Opportunities, Trends and Forecasts report.
The concept of microservices is extremely appealing to banks and credit unions because of its ability to expedite the development and implementation of new services and applications. In an environment where each application can be developed, tested, implemented and continually updated independently, eliminating the bottlenecks and complications of change, financial institutions can deliver advances in a timeframe that customers have come to expect.
What is a Microservice?
A microservice is a development technique, similar to service-oriented architecture (SOA), that pieces together a collection of loosely coupled services or applications to make a complete system or network. With the use of microservices, large networks or systems are divided into small modular systems. Each application or program performs one specific task, such as account balance or transfer money or deposit check, and can easily integrate and communicate with all other systems.
Benefits of Microservices
The true benefit of utilizing microservices is the ability to divide large systems and applications into smaller systems to improve modularity, make systems easier to understand, develop, test and deploy while also remaining more resilient to updates and changes. Microservices enable autonomous development teams to develop, deploy and scale the application independently, facilitating a more agile, robust system overall.
This approach also enables applications to be developed using heterogeneous methodologies, programming languages, application frameworks and data storage options - the best that are appropriate to the specific task while still allowing all services to work together to create a complete network of services. This increased flexibility and functionality provides a great value to customers and members.
The Impact of Microservices on the Financial Services Industry
The financial services industry will see tremendous benefits from microservices. In addition to the simplification of processes, cleaner workflow driven by independence and a greater degree of innovation, microservices will allow decisions to be made much quicker to meet market demands of customer and member expectations.
Utilizing microservices, banks and credit unions also can eliminate their age old struggle to become more agile, improve time to market for new solutions and features and address new issues with solution scaling - all of which impact customer and member satisfaction. In addition, if one service fails, the entire network will no longer be affected due to the autonomy of services and built-in resilience within the solution. For large regional institutions that are competing with the TBTF banks, having a microservice architecture will be crucial to their success.
Microservices already have proven beneficial for many organizations, including household names like Netflix, Google, Amazon and PayPal, among others. Microservices can help banks and credit unions adequately scale, meet stringent demands, and improve their chances of success in a highly-competitive financial services environment.