As margins decrease and industry consolidation continues all companies in the sector will eventually move to pure SOA architectures according to James Wolstenholme, research director financial services at Gartner.
"You consolidate systems, you consolidate processes, make them more efficient and you can increase volumes of trades while maintaining existing overheads," said Wolstenholme, speaking at the Gartner Financial Services Summit in London last week.
Pure SOA from the bottom up is still five to ten years away in financial services, but all financial services companies are linking SOA systems to legacy systems through messaging technology.
"We see product suppliers and firms in-house moving towards SOA in a hybrid fashion," said Wolstenholme. "This is not true SOA but using [programming interfaces] and middleware messaging software to be able to communicate with legacy systems."
This slow progression will help these firms plan their migration to SOA carefully and avoid "catastrophic failures which can cost massive amounts of money."
"Projects in major global banks fail if they are [not well planned] and there should be analysis up front," he said. "Problems are caused by not knowing the scope of the project before understanding the risk and knowing the issues."
He said organisations are taking this approach is because market dynamics have changed. "Systems in the past were built on short durations of change expecting long periods of stability but this has changed," he said.
He said investment banks, brokers and asset managers are all moving to pure SOA to reduce costs as the financial remuneration for their services reduces.
Wolstenholme said full SOA will arrive as the market consolidates.