For platforms aiming to differentiate their proposition with agility, creativity and speed to market – take a look to microservices.

In this article we look at how microservices are already delivering solutions to help platforms meet challenges and embrace new opportunities in a smart and cost-effective way, and the possibilities are endless.

Over a decade ago, before the days of “Tiger King” and “The Queen’s Gambit,” when Netflix was a young disruptor sending DVDs by post, the service was brought to its knees by a semi-colon. Revenue and subscriber numbers had been growing rapidly and the firm was scrambling to keep up. But for several hours in 2008, Netflix was unable to send DVDs to subscribers.

An army of software soldiers were deployed to find the coding error. The bug – a stray semicolon in the code that paralysed the system – got fixed. But it highlighted a weakness at the core of the business: an architecture that was intimately woven together that allowed errors in one section to affect other sections. It caused the fledgling and fast-growing firm to re-think its approach to software development. A few years later, Netflix moved to adopt cloud-based compartmentalised functions powered by APIs, supported by over 1000 microservices, each managing a separate functionality.

So, what can we learn from Netflix’s experience? Some of our investment platforms, now over 20 years old, are no longer the new kids on the block nor operating without legacy. Time has marched on; tech needs updating and re-platforming is the dreaded scurvy. But with upgrades looming, there is another way to make the proposition stronger, accelerate customer service and increase efficiencies of processes. Microservices provide safer, faster, cost-effective and smoother implementations and above all, perform their exact function to its best.

Examples in action:

To appreciate the impact of microservices for platforms, here are the critical use cases.

  1. Emails sent to customer service teams.

From our research, volumes range from 2000 – 5000+ emails received daily. These emails are free-flowing, contain keying errors, spelling mistakes and multiple requests in one – and they can come from end-clients, advisers, employers… the lot. Processing, responding and recording for future auditing means that emails can quickly take over while also be easily lost.

Using AI and deploying as a microservice can solve this by attaching itself to any system. It reads all emails (as well as other message types and documents), deciphers intent, responds directly, and based on its intelligence, takes decisions as to whether or not to escalate to a customer service agent – all at speed, 24/7. Customer service teams, with a state-of-the art triage service, are better able to focus on unusual or complex cases. In the case with our Stanza microservice, it leverages machine-learning technology so it gets more and more efficient and effective every day. For businesses, this is revolutionary. Stanza de-risks the peaks and troughs, delivers speedy turnarounds, supplies in one view the sentiment and topics of emails, and enables customer service agents to do what they do best – service those complex cases where their time is justified.

  1. Capital gains tax (CGT) calculators.

In the latest research from Platforum[1], financial advisers rate tax/CGT tools as the top key additional service provided by platforms with 83% using their main platform for CGT reports. In another research paper from NextWealth, advisers stated that they would like the ability to pull data from multiple platforms to calculate a client’s CGT position across multiple providers. Microservices, such as FinoComp’s Cobalt, offer this flexibility by enabling the adviser to optimise either a targeted amount of gain or specific amount of tax free proceeds including gains or losses held off platform.

  1. MiFID II ex-post cost and charges disclosure requirements.

Platform reports tend to be run to arbitrary dates that match financial reporting periods. Pensions are sometimes excluded. Products held on different platforms often have different reporting periods.

Amid such a tangle of interests, microservices are a potent solution. For example, microservices such as FinoComp’s CoCa can report data from any date range. Data can also be aggregated across platforms and is technology agnostic with implementations across the board including proprietary technology.

Many financial advisers are looking to not just comply with regulation but to go beyond the baseline compliance and offer full transparency and impact of charges. As a dedicated solution to a specific problem, microservices are more likely to be best in class, enabling advisers and platforms to far exceed the minimum.

The future is yours for the taking

We’re often asked about the future of platforms, and our view is that core platform technology – the nuts and bolts, if you like – is the essential foundation. It must be good at robust trading as a minimum. But there is an increasingly competitive world of propositions out there and as such quality add-on differentiators like CGT calculators are gaining momentum. Take note though, these microservices are not just for the new kids on the block. Latest research from NextWealth confirms that tankers[2] are turning on a sixpence with some of the biggest platforms by assets making the most progress towards digitalising processes. And if a microservice, such as a CGT calculator, performs well and as a result is thoroughly used, it makes all the difference to keeping your advisers on and their clients happy. 

By enabling dedicated items of functionality, microservices provide exceptional solutions in niche areas within the platform. Just as Netflix needed to adapt its technology infrastructure to scale, so too must investment platforms embrace the rise of microservices.

If you would like to learn more about microservices, please get in touch.

[1] Platforum: UK Adviser Platforms: Market Overview, March 2021


About the author

Simon Clare

Global Chief Technology Officer

Based in London, Simon is the Global Chief Technology Officer for Bravura Solutions. He is responsible for managing Bravura’s technical product roadmap and identifying how emerging technologies impact the wealth management and savings industry, particularly the technical and ethical questions surrounding the use of machine learning in financial services. Simon has an academic background in software engineering and mathematics. His career has primarily been spent in financial services, with experience in software development, solution architecture, product management and strategy. He has been with Bravura since May 2013.

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