Microservices have taken the tech giants – from Netflix to Amazon– by storm. The flexibility and benefits they’ve brought to those firms can also apply in financial services but to work effectively, fintech providers need to cooperate and adhere to open integration standards. Working together will be to the benefit of consumers, advisers and platforms.

An image of financial services taking the digital highways

What are microservices and how do they work?

In November 2019, Bravura acquired leading microservices provider, FinoComp.

Microservices are small, self-contained applications of functionality. They stick to a particular job, and they do it very well. With microservices, firms can pick and choose different pieces of technology and have those integrate against any back-office software.

The nature of this technology is that it can be used by platforms or across platforms to integrate data and perform a particular function.

FinoComp build tools that do a job, and that job can be done across any part of the value chain.

For example, advisers use an average of just over three platforms. Their client data is spread across different platforms with different reports. COBALT, FinoComp’s market-leading capital gains tax calculator, can be used by an adviser network or adviser firm to aggregate data from platforms to provide a capital gains tax calculator across the entire client base.

COBALT works by ingesting periodic updates of investor details, assets, corporate actions, distributions and any other information that goes towards the calculation of the cost base of investments. The data COBALT ingests need not be limited to a single platform.

The same applies to CoCa, FinoComp’s Ex-Post Costs and Charges disclosure tool. This is a platform-agnostic data store that can be used by an adviser firm, adviser network or platform.

What role do ‘open standards’ play in successful microservice integration?

To truly see the benefits of microservices, there need to be some industry standards around integration. Integration is what stitches the pieces and services together. It is an industry-wide responsibility and core to that is the emergence of open standards.

Open standards provide requirements, specifications, guidelines or characteristics that can be used consistently to ensure that data, products, processes and services are fit for their purpose and can be shared freely when required.

One of the ways Bravura is engaging with open standards is through TISA’s Open Savings and Investments Project. The Open Savings and Investments Project’s aim is to create a common set of standards for APIs for interfacing with disparate systems and registers. This enables providers to release their data in a secure and standardised form so that it can be shared easily between authorised organisations.

How do open standards benefit consumers?

The idea is to give consumers the power to have ownership of their data. And the ability to enforce providers to share their information via open standards when requested. For example, a consumer could share their pension information with their ISA provider so they could see their investments in one place. Or they might choose to share their data with an aggregator.

The benefit to consumers is clear. Open standards and data interchange infrastructure will allow Finocomp and Bravura to build components that can genuinely interoperate with each other.

The buy-in from software companies is essential. Bravura has shown a commitment to this through the acquisition of FinoComp and through its business strategy. The complementary nature of our businesses products and services is set to make retail financial services a more efficient industry.  

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