Breaking the Monolith - A FinTech Game-Changer

While the term ‘Breaking the Monolith’ is a more familiar term in the IT department than it is in the C suite, the implications for both are equally profound.

Basically, the monolith is the internal system that processes all the information that is part of an FIs fintech system, from managing all the backroom data to the front end aspects of an FI’s personal financial management platform, for example.

Traditionally, anytime there were changes or modifications to one part of that monolith, the entire system is at risk of unrelated failures. There might be small portions that need to change, but finding them before they become an operational problem is difficult. That means changes incur greater risk of systemic failures.

The risks of either, meant downtime on the front end or back end (or both), and the possibility of coding errors creating more havoc down the line with an unrelated service.

It was like a classic production line where something that changed at the beginning of the line may not seem to have significant relevance to what happened further down the line, but could create cascading issues throughout the entire system.

This is the monolith. And it is a challenge across many industries. Now that financial services are beefing up their technology, this FI-specific monolith has been of increasing interest not only to the IT devs, but to the front office as well.

Breaking the monolith means more efficient operations, better scalability and a better, more responsive user experience. All this adds to FIs’ top and bottom lines. 

 About a decade ago, microservices were introduced into this challenge as a strategy to combat to the monolithic production line model. These microservices have advanced quickly as APIs have become more powerful and welcome tools for developers.

Microservices are a way to have each operational division in the process work on its specific tasks while not affecting the monolith. For example, if you want to modify the interface between your clients’ information and your cloud provider to give more powerful analytical tools to your clients, that work can be done outside the monolith and then plugged back in when it’s complete.

Imagine a circular production line where different pieces can be pulled off the line and plugged back in (via custom APIs) without affecting the entire process. Once all the various pieces have been checked off, the circuit is complete and the monolith digests the new information.

In our case, we have found a way to cut our transaction processing times from 24 hours to a mere 2 hours since we have built our customized APIs. This also helps us take more advantage of the cloud, so our clients have access to more enhanced data closer to real time, and their customers have a much deeper experience working in their aggregated accounts.

While fintech firms are still just at the beginning of exploring the possibilities it’s important to understand what a significant technological leap forward this is to the future of banking.

There are certainly shiny objects that can distract leadership from this real game-changer, especially those whose eyes glaze over at the more technical side tech. But that shouldn’t dissuade anyone from talking to your technical architects about how breaking the monolith could help their FI take full advantage of today’s - and tomorrow’s - tech.