Open source means that the source code and compiled versions of a software offering are completely open and available for review and changes to all. The concept of open source has always been highly regarded in the tech world, as it is developer friendly and open to improvements from experts worldwide. It is no wonder that many other industries are also now beginning to see the advantages in adopting open source.
In the financial services industry, technology has always played a big part right from the transaction mechanism to the data storage and security aspects. The industry has also gone through a lot of ups and downs with challenges such as economic crises that are tough to recover from. This means that the players in financial services sometimes have to achieve high goals while working with constrained resources including time.
It is now being seen that more and more financial services organizations are moving to products that are available as open source. Let’s take a closer look as to why this is the case:
Cost effective:The first and biggest impact of opting for open source is the immense savings involved in pricing in comparison to buying a ready and packaged product. While there might be a small learning curve involved in learning the technology used, this is not comparable to the costs involved in buying and paying for maintenance of such a solution. Choosing an open source solution would definitely reflect well in the balance sheet of an organization in the long run.
Range of choices: Choosing a “black box” product would force you to go along with a specific set of technology choices, with you not having any say in the functioning in the lower layers of the solution. With open source, you can tweak and improve the offered product according to the needs of your organization. With the variety of open source solutions available, you can also keep a close eye on the type of technology that is used and choose accordingly. You can also use only the functionality as required, without having to pay for additional features simply because you were not allowed to customize a product.
Easily scalable: With the entire source code in your control, scaling up your customer base would be an intuitive process. Your technology team would be able to immediately identify any loopholes that might arise due to the increased demand, and correct or change the same as required. The costs involved in scaling up would also be much lower in an open source scenario as it is probably only the additional data storage that you have to account for.
Easy to maintain: Ready products can be challenging to maintain as you are reliant on a customer support team for any corrections and this could lead to delays or errors in important transactions related to your customers. With an open source solution, once you have spent time on gaining know-how of the product, maintenance becomes a much simpler process and a completely in-house one as well.
Support from experts:All open source products thrive on the inputs given by a community of users that also comprises experts in the field. Your organization can gain the advantage of such dynamic product improvements made after it has been used and tested by a large group of users. Such a process could mean that any errors could be identified and corrected much more quickly and this could prove to be a major advantage when compared to a ready and closed product where each new version is strongly controlled by the company that offers it. This article highlights the fact that the large base of specialized experts available for an open source product results in a much quicker time-to-market.
Product stability: With an open source solution, you can be reassured by the fact that you will always have support from a community, even if the original developers were to move to other organizations. This is a useful benefit especially in the case of financial services companies, where a quick turnaround with error identification and corrections need to be the order of the day.
Skeptics might raise critiques such as open source solutions not being complex enough to deal with their requirements, or that the security and maintenance of such a product would be challenging compared to a packaged product. We hope that the above list of benefits answers these questions and brings out the fact that open source could prove to be of great benefit to financial services organizations.
Do you have any questions or other remarks for us? Do let us know in the comments section below.