Serverless Architecture for Financial Services
When it comes to IT infrastructure, financial services organizations need a platform that can help them navigate a delicate balancing act. On the one hand, their customers have extremely high expectations. On the other, those expectations have to be met while protecting sensitive information and meeting stringent regulatory requirements.
With branches and offices being closed during the lock-down periods of the COVID-19 pandemic, financial services firms accelerated their process of offering all services online. These efforts were also necessary to meet ever-increasing customer demands. Customers want the convenience of online and mobile access to comprehensive services, while expecting digital interactions to be ultra-responsive, engaging, always available, and consistent across all channels.
And when it comes to something as important as their savings and investments, customers put their trust in financial services firms to keep their valuable and extremely sensitive information safe and secure. So, perhaps more than any other industry, these firms have to provide extremely high levels of security, while always remaining compliant with strict regulations.
To tackle these challenges, many financial services companies are adopting a serverless architecture. Taking full advantage of cloud technologies, a serverless database enables you to delight your customers with fast, always-on services, while protecting their data and complying to regulations around the world. It also offloads IT infrastructure concerns, including management, provisioning, scaling, and maintenance, to a cloud service provider. That opens up time and resources to focus on keeping your customers happy and creating innovative products and services, without the nuisance of managing the infrastructure that supports them.
Let’s take a look at additional financial services infrastructure requirements, and then we’ll see if a serverless architecture might be the answer for those challenges.
Requirements of financial services applications
There are several things financial services companies need to get just right to build the best possible applications. Let’s take a look.
Scalability: Financial services companies often handle massive data volumes, while managing a wide range of complicated offerings and rapidly growing client bases. And each client will require individualized calculations for the products and services they’re using. This all adds up to a tremendous load on the IT platform. And spikes can occur at any time. For example, a sudden uptick in the client base, or full-scale calculations that might need to be run for each customer, all at once, due to unforeseen market volatility. Obviously, growth is something all financial services firms strive for, but it’s difficult to get capacity planning just right. You need a solution in place that can automatically scale to immediately handle even dramatic increases in resource needs. At the same time, the infrastructure should also seamlessly scale back down when demand decreases, so that resources are used efficiently, and money isn’t wasted on idle equipment.
Security and regulatory compliance: Financial services is a heavily regulated industry. Firms are required to meet numerous, diverse, and always changing requirements. They need a platform built to support and meet all regulatory, auditing, and reporting requirements, no matter where in the world the business is operating. And, since their business is literally money, it’s no surprise they are a favorite target of malicious hackers. They need sophisticated systems in place to detect fraud and authenticate users to protect sensitive customer data from viruses, malware attacks, phishing attempts, and more.
Data autonomy: Data may very well be the most valuable asset for financial services firms. Don’t get locked into one cloud provider. Retain control over your own data, so you can easily migrate it if necessary.
Performance: Complex financial models, with seemingly endless variables and never-ending computations, are the norm in this world. These companies routinely run sophisticated calculations on large-scale datasets. In fact, it’s not uncommon for them to lean on artificial intelligence and machine learning algorithms. Here, speed and accuracy are both essential. The right answer too late is worthless. The wrong answer on time could be damaging. You need a platform that can shorten model execution times and provide near instant results.
Flexibility: Financial services developers need a flexible platform so they can quickly build and launch new products and services, or easily extend capabilities by expanding their ecosystem and integrating outside services. The database platform should also allow you to deploy in any environment and with the cloud vendor of your choice. And data comes in all shapes and sizes. So, it’s important to find a multi-model solution that allows you to incorporate a wide variety of data formats.
Availability: Customers rely on financial services sites and apps to be up-and-running at all times. Their financial well-being depends on it. A lot is at stake for them and their families. They might turn to your application in all kinds of urgent situations, such as withdrawing money for an emergency, making a time-sensitive trade or investment, or gaining financing for a new home. If your service is down, it could directly impact their pocketbook, or they could miss a one-time opportunity. They can’t afford for your application to be down, and neither can you. If it is, you’ll probably lose their trust and their business. Of course, your platform also needs to always be up-and-running to support your company’s day-to-day business operations, which includes incredibly time-critical computations and evaluations. So, it’s crucial that your platform is always available, with no single point of failure.
Benefits of serverless for financial services applications
Let’s explore some of the benefits of serverless databases to see why they’re such a good fit for handling financial services application requirements.
Automatic scalability, with all the power you’ll need: With their ability to automatically scale, serverless databases are a good fit to efficiently handle the huge data volumes and highly variable workloads that financial services companies deal with. Compare that to the traditional approach where you’d be stuck with your current infrastructure and capacity. There’s a good chance you’d miss out on unexpected opportunities or be in a bind with an unanticipated emergency. Even if you could upgrade your infrastructure at the last minute to handle these situations, it would be very expensive. Serverless databases ramp up quickly and continue to provide immediate response times, even when handling spikes in traffic, rapidly growing user bases, enormous datasets, and computationally intense calculations. Want to run AI and machine learning models on your datasets? With serverless, you’ll instantly have the power at hand to do it. But serverless doesn’t just scale one direction. These platforms also scale down when demand slows. You’ll remove waste and never be over or under-provisioned. Resources are only used when necessary. Move away from the inefficiency and guessing game of attempting to plan and purchase capacity ahead of time.
Lower your operational costs: Serverless is an extremely efficient and cost-effective approach. When serverless databases dynamically provision server space, you will only be charged for what is used and no more than that. You’ll no longer have to waste funds on expensive CPUs and memory reserved and idle for “just in case” situations. And, as you’re getting started, you’ll likely be able to take advantage of one of the free tiers most of the cloud service providers offer.
A protective layer to handle your security and regulatory needs: Customers put their trust in you when they share sensitive and valuable information about their finances and investments. So, it makes sense that data security is an extremely high priority for financial services companies, and it’s regulated that way too. Fortunately, serverless platforms provide a protective layer with advanced security features built-in, such as identity and access management (IAM), authentication, fraud detection, encryption, auditing, compliance, and more. They ensure the integrity of your data with a ledger of transactions that provides an immutable, verifiable log of application data changes, transactions, incidences, and documents. This is automated, reducing human error, risk, and the possibility of fraud. Considering the highly sensitive information being handled, it’s no surprise financial services companies are subject to frequent audits and strict regulations. Laws and regulatory standards are complex and vary around the world. But, when you move to serverless, the responsibility to understand the intricacies of each and comply with them is absorbed by a third-party, cloud service provider.
Always available: Customers need 24x7x365 access to their financial information and to the applications they’ve come to rely on. Serverless databases are distributed, with data replicated across data centers and regions. That enables them to provide built-in, always-on availability and to guarantee business continuity, with no single point of failure. And being geographically close to customers also decreases response time.
No infrastructure management frees you up to do your best work: With serverless, infrastructure management is abstracted away. Tasks like configuration, managing compute resources, provisioning, maintenance, and scaling are all taken care of by the cloud provider. That makes it easier for developers of all levels of experience to work on the platform. And, without infrastructure concerns, you can focus on building great products and services to please customers. Serverless platforms are built for fast and agile development. By using them, you and your team can dramatically increase the speed of innovation for your company, while slashing deployment times.
A flexible foundation: The best serverless platforms are multi-cloud and multi-model. They provide the freedom and flexibility to store your data wherever you’d like, along with the versatility to work with all kinds of data. Serverless is also a flexible, agile platform for developers to do their best work. Applications can easily be modified, and functionality can quickly be added. Expanding capabilities by integrating with outside services is also straightforward.
Get started with serverless for financial services
Implementing a serverless architecture can help you walk a tightrope, balancing customer expectations of real-time responsiveness and guaranteed availability, with protecting their sensitive data and complying with extensive, strict regulatory requirements.
To get started, learn about DataStax’s multi-cloud, multi-model serverless database, Astra DB, and try it for free.
Also, make sure to take a look at the benefits a serverless architecture can provide e-commerce and IoT applications.