FINOS is a nonprofit organization assisting open innovation in the financial services community. According to them, organizations that adopt open-source software have the highest chances to grow in an ever-evolving technological landscape. FINOS is helping to make that happen. Here's what they had to say about open innovation in financial services.
Question: It's only been a year since you officially launched FINOS and your member list already has names like Goldman Sachs, Refinitiv, and JP Morgan. It's quite an achievement to encourage open innovation in such a conservative industry, how did you manage to do it?
Answer: It's not easy. We are still working hard to promote deeper open source engagement within financial services. While the industry traditionally espouses a compete-at-all cost mindset, and although not prevalent, successful collaboration has happened in the past, e.g. FIX trading protocol. This history is fundamental to open source development. By embracing a culture that brings innovation to IT infrastructure, firms have an opportunity to mitigate inefficiencies and reduce time to market. FINOS also provides a structure and governance that enables firms to collaborate in a more neutral and controlled environment.
Question: Your programs empower FinTech companies to collaborate in developing open-source technologies that will support the general growth of the industry. Yet, there are organizations among your members that are direct competitors to each other. How do they keep their competitive edge when they open their source code?
Answer: We encourage openness and collaboration while recognizing that firms can, and should guard code that provides a competitive advantage. However, firms shouldn’t try to reinvent the wheel. In our experience, there is a significant amount of software within and across financial services firms that do not confer a competitive advantage. In fact, everyone can benefit from more collaboration. This includes sharing excellent charting tools and blotters to improve desktop interoperability. They can also work together to meet regulatory requirements, leveraging the experience and knowledge across firms. Finally, open-source does more than just give technologists the opportunity to customize existing code to suit their environments and needs. It also fosters collaboration through a “give and take” approach with contributions, so all parties can receive the full value of the code sharing.
Question: Your programs cover open collaboration in areas from data management and visualization to voice technologies. Where do you see the strongest collaboration and what technologies do companies mostly rely on?
Answer: Our members represent many aspects of the financial services ecosystem, so we see collaboration across numerous different areas. We see continued interest in improving desktop interoperability, with a focus on making it easier for developers to quickly deliver better interactions on a trader or sales person’s desktop. Data is also a focus including functionality around tick databases, standards for security reference data and data visualization tools. We also have critical enabling projects around cloud services certification as well as a CICD infrastructure with security and license checks to make collaboration easier. We truly rely on the diversity of our members, including banks, service companies, FinTechs and consultancies to provide different views and expertise.
Question: Can non-members or individual developers contribute to FINOS' programs?
Answer: Yes. As an open-source foundation, we welcome participation and contributions from both members and non-members. We source ideas and code from a diverse field of experts and encourage participation in our growing open-source community!
Question: What are the most common obstacles FinTech companies face when it comes to open source collaboration and how do you address them?
Answer: Lack of standardization and the challenges of navigating complex organizational structures and procurement processes can make it difficult for FinTechs to collaborate with large banks and other financial services companies. We help level the playing field. Both large and small firms participate with an equal voice in our projects and working groups in a fully transparent manner. These groups are focused on addressing real industry challenges. For example, FINOS recently announced version 1.0 of its FDC3 standard for desktop application interoperability. This standard, including open APIs, can easily be implemented to enable seamless interaction between applications without the need for pre-established bilateral agreements. This makes it much easier and faster to implement.
Question: Your latest program aims to support the growth of the Decentralized Ecosystem. How do you think it will contribute to the development of the ecosystem?
Answer: FINOS’ Decentralized Growth Program helps build an open community that works together to reduce development complexity for decentralized applications in financial services and beyond. The program is still young but is a natural home for open source tools and languages that benefit from a neutral foundation focused on financial services with established open source governance and principles.
Question: You have many startups as members, some of them even made the Top FinTech Startups for 2018 list by CB Insights. How did the FINOS membership help them grow?
Answer: FINOS is the essential element when organizing technical leaders from the buy-side, sell-side and FinTech community. Our goal is to break down barriers to collaboration among these groups. By connecting financial services firms with FinTechs, the industry realizes the great benefits of open source technology. FINOS enables technology startups to share ideas that can ultimately transform the industry. They can also network and explore new ideas that the Foundation provides. This sets them on a path for growth. Without a platform for open collaboration, both financial institutions and FinTechs would have less opportunity to move forward in a changing technological landscape.
Question: Any final thoughts you'd like to share with FinTech founders and executives?
Answer: Hiring talented developers and problem-solvers has never been more important in financial services. The industry used to be the place to go for new graduates, but that has shifted to big tech companies. Banks need to change their mindset and start recognizing technology talent is essential. Open source can be a great way for technologists to differentiate themselves and their companies. The industry needs to gain access to an experienced talent pool to address the biggest challenges. We are looking for contributors who are motivated to solve problems and open source provides a pathway of doing that. We advocate strongly for modern software companies to attract top talent, so they can continue to deliver incredible customer experiences.