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Scalable Cloud-Native Databases Aid FinServ Modernization

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Banks and financial services institutions need highly scalable, cloud-native databases that can deliver fast transaction rates while providing easy access to transaction data.

Like many industries, financial services institutions (FSIs) are undergoing dramatic change. In response to the entire world going digital and the explosion of data available to drive decision-making and customer experiences, banks are pursuing aggressive innovation in new applications and cloud infrastructure. Specifically, FSIs need scalable, cloud-native databases to underpin modern applications.

In particular, banks will need a new data platform to support these new requirements, ultimately replacing Oracle, IBM DB2, NoSQL, and other legacy systems.

Emerging fintech companies are challenging many FSIs. Retaining existing customers and gaining new ones will require a continuous rollout of new and innovative services. Accomplishing this will require that transaction services play a larger role in the digital transformation of FSIs. Examples of what new services are needed include:

  • Dynamic pricing
  • Hyper-personalized recommendations, content, and offers
  • Real-time fraud analysis
  • Real-time business process optimization

Supporting such services will require that FSIs make use of transaction data across the many channels through which their customers interact with the organization. FSIs must also embrace the latest advances in analytics.

A cloud-native foundation

Accomplishing all of this requires FSIs to adopt best practices for modern application development and deployment. Increasingly, that means using cloud-native architecture. Cloud-native applications or services are loosely coupled and highly distributed, as is the norm with many modern applications.

Fundamentally, a cloud-native architecture uses microservices and containers that leverage cloud-based platforms as the preferred deployment infrastructure. Microservices provide the loosely coupled application architecture, which enables deployment in highly distributed patterns.

Containers are important because developing, deploying, and maintaining FSI transactional service applications requires a lot of ongoing work. Containers offer a way for processes and applications to be bundled and run. They are portable and easy to scale. They can be used throughout an application’s life cycle from development to test to production. With such an approach to creating new services, businesses get a highly dynamic system composed of independent processes that work together to provide business value.

Required: Performance plus flexibility plus scalability

FSIs, and companies in other industries, have found that the move to a cloud-native approach for applications and services introduces new problems. Many traditional data platforms were not designed for distributed environments. Some may be able to scale as transaction volumes grow, but most break down as the complexity of new applications and services grows.

What’s needed is a flexible, highly scalable database solution that can deliver the fast transaction rates needed while providing easy access to the transaction data for other purposes to support new services and a more personalized customer experience. Some key properties and features that help include:

Scalability: A suitable solution should be able to scale by simply adding new nodes and avoiding any manual manipulation of data. It should automatically rebalance and replicate data throughout a distrusted system.

Consistent transactions: An appropriate database should ensure that transactions only change affected data and any data written to the database is correct and valid.

Built for Kubernetes: A suitable database should be architected and built from the ground up to deliver scalability and survivability in a Kubernetes environment. It should be able to distribute data across nodes and survive any failure.

Familiarity: Any database used to support new applications and services should let a company leverage its existing SQL expertise. It should work with your current applications, align with current development approaches, and empower the data scientists.

Deployment flexibility: A database should be architected for the cloud, meaning it is designed and built from the ground up to take advantage of the scale and resiliency of the cloud. Yet, it should be capable of being deployed on-premises or across any cloud.

Support for geo-partitioning of data: Developers and FSIs should have the option to designate where data resides to reduce latency and thus increase performance. Geo-partitioning also is essential to meet the requirements of data protection and privacy mandates.

ACID compliance: A suitable database will guarantee ACID (atomicity, consistency, isolation, and durability) compliance in a distributed transaction across a distributed database, where no single node is responsible for all data affecting a transaction.

Selecting a technology partner

For FSIs to be more responsive to customer needs and stay ahead of the competition requires a special kind of distributed database. Like many other technologies, a company can look for a free solution and then cobble together other elements to add the essential enterprise features needed to run the thing in a production environment. Or they can partner with a solutions provider that brings both the technology and deep industry expertise needed for modern FSIs applications and services.

One company that fits the bill is Cockroach Labs, which was founded by a team of engineers dedicated to building cutting-edge systems infrastructure. It is the company behind CockroachDB, the cloud-native, distributed SQL database that provides next-level consistency, ultra-resilience, data locality, and massive scale to modern cloud applications.

CockroachDB delivers distributed SQL, combining the familiarity of relational data with limitless, elastic cloud-scale, and bulletproof resilience. CockroachDB is:

  • Simple to scale as it automatically distributes data and workload demand
  • Architected to handle unpredictability and survive machine, datacenter, and region failures
  • Guaranteed for ACID-compliant transactions
  • Cloud-native and designed for Kubernetes
  • Geo-partitioning friendly, letting FSIs pin data to a specific location to reduce transaction latencies and comply with data privacy regulations.

CockroachDB is in use at a number of major banks and enables FSIs and developers to deliver on all the promises of data-driven, modern transaction services that meet today’s demanding and evolving customer expectations.

Read the other articles in this series: 

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Salvatore Salamone

About Salvatore Salamone

Salvatore Salamone is a physicist by training who has been writing about science and information technology for more than 30 years. During that time, he has been a senior or executive editor at many industry-leading publications including High Technology, Network World, Byte Magazine, Data Communications, LAN Times, InternetWeek, Bio-IT World, and Lightwave, The Journal of Fiber Optics. He also is the author of three business technology books.

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