Implication 1: Innovation glut drives the need for new architectures

We've covered four trends in our recent articles, but what are the implications and how should traditional and emerging banks, insurance firms, and their technology partners be planning strategies for addressing them? In this next series of articles, the Angry Rabbit Group will offer its take on how these organizations can best steer in these changing currents.

AI enables small teams at financial services institutions (FSIs) to build features faster and more efficiently than ever before. As these features need to become part of the overall application landscape, architectures offering integration capabilities that meet hyper-flexibility requirements will become a critical factor for business success. 

Today, for example, many architectures use events, and APIs for integration. This is undoubtedly more sophisticated than what we’ve seen in the past. Yet, even with modern integration solutions, innovation glut carries a significant risk of “spaghetti-like” integration –more sophisticated, but just as complex and confusing as it used to be. 

New target state architectures need to avoid this “spaghetti risk”. They need to support hyper-flexibility — both for the rapid introduction of new features and for the potentially even faster removal of failed features. Evolutionary architecture and its key element, the Ev hub, are both the overarching goal and the tool of choice. 

To support hyper-flexibility, the Ev hub needs to translate incoming and outgoing message queues, API calls, streams, and events between the various components of an FSI’s application landscape — among many other technology requirements. This (virtually) central role of the Ev-Hub offers FSIs the opportunity to make hyper-flexibility manageable. However, new target state architectures require more. 

One comment on this series read “Choosing between dozens of narrow capabilities instead of platforms means dozens of integrations, dozens of vendors, dozens of contracts. Sounds like a nightmare.” This is correct – even if we would avoid using the word “nightmare”. In fact, we’ve written that FSIs are ill-prepared to cope with innovation glut. 

The good news? FSIs’ engineering organizations aren’t simply going to disappear. They will continue to evolve in terms of structure and size, as well as the mix of roles and competencies. For example, testing and governance will become increasingly important. Governance, for instance, will require tools that enable the management of rapidly changing integrations, vendors, and contracts.