Open source's slowly growing role in Fintech
Well, that's different. Most of the time when a business realizes a process helps them they embrace it. But, despite 69% of financial technology leaders saying open-source software and methodology increases productivity, they're not so keen on implementing governance programs. This insight came from the Fintech Open Source Foundation's (FINOS) 2021 State of Open Source in Financial Services Survey.
Open Source
This survey, conducted with Linux Foundation Research, Scott Logic, Wipro, and GitHub, found that despite open-source financial services adoption being widespread, there's much more left to be done.
That's because many financial firms don't fundamentally understand open source's role in their business and governance strategy. When asked about whether organizations were "open source first" in the survey, 75% said "no" or "they didn't know." Only 8% of respondents in this study have policies that always encourage open source contribution, compared to 36% in other industry sectors. Only 35% of respondents knew if their business had an Open Source Program Office (OSPO).
It's an old story we've seen in other companies. The CEO may claim, with perfect sincerity, that their business doesn't use open-source software while everything except the kitchen sink actually runs on Linux and open-source software. That's no way to run a company. Every company today depends on technology and, for most of them, that means open source.
This must change. Gabriele Columbro, FINOS's executive director, said "Open source should be a strategic technology pillar for this industry, like cloud or fintech. While we have seen the outlook on open source drastically improve in the last few years, across a historically closed industry, we still need dedication across all leadership levels at financial institutions and fintechs to build a truly open financial ecosystem to ultimately deliver the much-needed, next-generation technology stack the industry requires."
Columbro urges banks and other financial technology businesses to look at the numbers. "The results are clear -- if financial industry leadership fully commits to open source and fosters a culture of collaboration within their companies, they can expect to make a positive impact on their business."
That can be done by formalizing open-source policies and developing an open-source strategy. This needs to happen at the top to get everyone on board to using open-source software to deliver value.
The report also found:
Innovation & Reduced Time-to-Market Key Motivators for Financial Services to Engage in Open Source: The survey found that at least 80% of respondents agreed or strongly agreed that innovation, reduced time-to-market, and total cost of ownership are now recognized as key reasons for financial services firms to engage in open source. This confirms the industry is on par with the broader understanding of open source seen across the wider tech landscape.
Financial Services Needs More Open Source Leadership: The survey showed that only approximately half of respondents had a single leader for various open-source activities, such as contribution and consumption.
Open Source Consumption Policies are Becoming More Prevalent: Although open source leadership is still becoming part of business operations at many firms, fully 58% of respondents to the survey attested that they have a policy around consumption that allows it to some degree. This is an encouraging sign for the momentum building in open source adoption at financial firms.
Inner Source Contributions are Significant: Inner source -- the application of open source development practices inside an organization -- is a growing trend with 59% indicating that they or their colleagues contribute to work-related software projects that are open to their business unit or to their entire company. Although there is some debate about whether inner sourcing leads to more open source projects, it's a sign that financial firms are moving in the right direction.
Need for Governance Policy Education Around Open Source: 32% of the respondents either don't know if their organization has a policy or assert that it doesn't have a policy. This shows a lack of understanding of open source and its role within many firms' business models and strategies.
A Culture of Innovation Can be Realized: Respondents indicated that they want to contribute to open source because "it's fun" (53%) or they "learn to code" (54%). Although only some (40%) get to spend time at work contributing to open source projects, most (66%) spend some personal time on this activity. Culturally speaking, employees at many firms are enthusiastic about open source but haven't quite built the structure to help it flourish.
The Financial Open Source Community is Becoming More Diverse: While still far from ideal, women are better represented (6.86%) in the financial open source community than in the open-source community at large (3.17%), when compared to the FOSS contributor study.
"There's clear enthusiasm for open source in financial services, but the survey has also identified the concerns that constrain its adoption in this highly regulated sector," said Colin Eberhardt, Scott Logic's CTO. "I'm greatly encouraged because this is a solvable challenge. Tried-and-tested policies, processes, and tools already exist that financial institutions can use to break through these barriers and benefit from the innovation that open-source software and standards deliver."
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