Banks and financial services firms were once wary of free and open source software, often due to the operational and legal risks associated with code integrity and software licensing, among other areas.
That has since changed, with 86% of IT leaders in the financial services industry now endorsing enterprise open source at a time when flexibility and innovation was needed most, according to Red Hat’s 2022 state of enterprise open source report.
Indeed, to Singapore’s OCBC Bank, the need for flexibility and innovation had been behind its decision to embrace open source as it faces more competition from emerging fintech firms and neobanks.
“Banks and financial services firms are facing tremendous competition from digital banks, and open source gives us the speed-to-market and enables us to continuously innovate,” said Dedy Lim, vice-president and head of technology architecture at OCBC Singapore.
OCBC is currently using Red Hat’s OpenShift container platform to modernise its applications, reduce its reliance on proprietary software suppliers to improve resiliency, and deliver new business capabilities.
Speaking at the recent Red Hat Summit: Connect conference in Singapore, Lim said OpenShift is also being used to power its enterprise data science platform and scale up deployment of artificial intelligence (AI) capabilities.
These AI capabilities, Lim said, are now being applied in various business processes such as credit processes, making its applications more intelligent. And with the use of open standards and application programming interfaces (APIs), Lim said OCBC has been able to deliver services that tap into core banking systems.
At a separate media briefing on OCBC’s digital transformation journey, Lim said the bank’s application modernisation efforts underpinned by OpenShift are still underway, starting with those that are used by the front office and customer service teams.
Lim added that as the bank progresses along that journey, it will look into modernising core banking functions like payments and loans, as well as its customer information system, with the goal of moving them to cloud.
On the next steps in its transformation journey, Lim said the bank is looking into tapping the power of data to know its customers better, including their credit risk profiles, so as to deliver a “differentiated customer experience”.
Besides OCBC, rival DBS Bank is also a keen adopter of open source software. DBS’ analytics initiatives, for example, were built on Apache Spark, Python and Hadoop, as well as databases like PostgreSQL and MariaDB, all of which have enabled the bank to leverage the best of open source technologies.
According to Red Hat’s research, digital transformation, application integration, IT infrastructure modernisation and application development are the top uses for enterprise open source software globally.
Some 74% of IT leaders expect to increase their investments in open source for emerging technologies. This is expected to raise the proportion of open source software in their overall software footprint from 28% today to 33% in two years.
Read more about open source in APAC
- EnterpriseDB has seen more enterprises in the region replacing their Oracle databases with Postgres to support their digital transformation initiatives.
- Software developers are taking longer to fix vulnerabilities and many do not know about the dependencies of open source software components they are using.
- Open source data storage offers a great deal of flexibility, but unlocking its benefits will require strong technical resources to meet requirements such as stability, high availability and security.
- APAC organisations are using open source software to modernise their infrastructure and develop containerised applications, though security concerns linger on.