Connected, Immutable Data and Trust - Technology within Financial Services

27 June 2019

The old adage is that the only constant is change and that change is constant.  That is certainly the case in today’s financial services arena particularly with regards to technology, which is now the fundamental enabler for success within the industry.

Technology is advancing and evolving, as are the mindsets, risk appetites and expectations of business decision makers, who look constantly at-risk management, operational resilience, business income and margin, amongst other business objectives.

But of course, it’s not only businesses being affected, consumers are either embracing or grappling with the speed of change, data, information and their experience with different companies. Clearly some of these expectations are contradictory and technology solutions’ providers need to be masters of managing multiple and conflicting priorities and expectations.

Backing the right horse

As important as the ‘conflicting priority’ juggling act is the ‘selection of the right horse’ as in choosing the right technical solution for the long term, (think back to VHS versus Betamax). This includes avoiding becoming either a one-trick pony or a ‘jack-of-all-trades, master of none’. As both a supplier and consumer of technology within financial services, times have never been so interesting.

Companies within our sector are beginning to fall into two broad camps in terms of the type of technological solution they are looking for. In the first camp are those looking for a single solution from a single provider, end-to-end if at all possible. What they are looking for here is a common, seamless and consistent solution, developed, delivered and supported by that single provider. 

The obvious benefits of this approach include the ‘almost’ guarantee that everything works together including perceived ease of integration, testing, speed of change, and less complex vendor management.

The clear drawbacks include whether it is really possible to attain a market-leading solution with this approach, on the basis that no single supplier is market-leading in every technological area.  The other drawback is how to effectively manage upgrades, for example, is the option all or nothing?  Does a bank or building society have the capability to regression test at scale, with or without automation?

The second camp focusses on a best-of-breed approach which presents a different set of benefits, most obviously the potential to deploy market leading, best-of-breed solutions.  This camp also has the ability to perform bite sized upgrades in a micro-service fashion. This approach does require sophisticated APIs, orchestration capabilities and an organisation capable of managing them. Consideration also needs to be given to the complex vendor management which this approach requires.

As always there is no perfect answer to this conundrum and the best solution is usually somewhere in the middle.

The direction of travel

The direction of travel for market leading solution providers such as Phoebus Software Ltd, is to provide a best-of-breed loan and savings platform.  This has the accuracy, robustness, scalability, and operational resilience that is only possible with a thirty-year heritage and the experience which comes from a platform supporting over £50 billion of assets within an open API architecture. This platform connects, on clients’ behalf, to almost any other technology, developed under the Open Banking standards of Restful and JSON. 

The hosting of solutions is managed within virtual datacentres or in the cloud, operational aspects are co-ordinated and active partnerships are in place with clients to validate integration touchpoints, upgrades and security.

This might sound like a great sales pitch, but what does that mean in practice?

The direction of travel is to focus on the basics of what a core system does well, what it is good at, and what attracts clients to it. This then becomes the foundation, enabling clients to connect to additional technologies which are important to them, and which are often best provided by other specialist technology providers. This includes hosting.

Although financial services is a traditional, conservative industry with traditionally conservative regulators, the direction of travel by banks, building societies and their technology providers, is clearly towards providing a multitude of capabilities via cloud platforms, with the numerous benefits of cost, resilience, security and flexibility which this provides. 

Referring back to the importance of backing the right horse, there are, of course, many flavours of cloud, some of which may or may not stand the test of time. Those responsible for technology choices need, as much as possible, to future proof solutions to ensure that as many as possible will survive the test of time. 

A current solution in this area is what are called ‘containers’ and the associated “discovery, orchestration, horizontal scaling and self-healing capabilities” – the marketing here is great! 

Of course, in the conservative financial services world there are still outstanding concerns to be managed and time and focus is still required. 


Leading the way with digital

So what does the modern application architecture of the future look like?

The diagram above details a vision of the near future.  There needs to be a central core, a central source of truth, and a central calculation engine which ensures accuracy, reliability and immutable, unchangeable data associated with accounts, transactions, and balances. This central core must have the ability to connect… to anything.

Starting with the basics, and those things required by the law and the regulator, this includes identity, identity verification, authentication, knowing your customer and anti-money laundering regulations etc. 

This space is growing rapidly.  Gov.UK has a solution, UK Finance members are “exploring the potential for a national digital ID scheme for financial services”, and of course there are many commercial solutions.  Once again, the comment of backing the right horse becomes increasingly relevant, but how is a business leader or an IT director to know exactly which the ‘right’ horse is?  Modern application architecture needs to be able to connect to any and all of these solutions and be nimble enough to allow the integration of new solutions and new technologies as they mature.

Several government agencies are leading the way in the area of digital, providing more immutable data, more capability, key to the effective operation of the financial services industry.  The land registry is making great progress on the digitisation of deeds, key to reduce costs and speed for loans secured on property and is expanding that capability with the innovation of their “digital Street” approach; various digital activities are underway at the HMRC; and the FCA’s sandbox is enabling digital innovation at a pace.  The architecture of the future will be flexible enough and open enough to connect… to anything.

Data is the new oil

Data is the new oil, apparently.  Data sources are many and varied and new sources of data are appearing on an almost daily basis.  For the new architecture model to be successful, it will need to be able to connect into, and to extract meaning from, multiple data sources.  It will also need to feed data into multiple data repositories to allow businesses to analyse the data and what it means, to help with their decision making and future business planning.

All data types, structured, unstructured, real time and historic are in scope, and those making the decisions will be able to map data from multiple models.  The immutable nature of the data, and standards for the definition of data elements will be the challenge for the financial services industry.

A look to the future

Critical to the success of the architecture and ecosystem for financial services is the capability to allow and enable payments, whether these be payments as pledges for savings accounts, payments against a loan, or payments to consumers for any reason. 

Individual solutions providers, who are not payment providers, will provide the necessary connectivity to all and any payment options which a bank or building society has decided to accept. 

Questions to be asked here are: Will the current payment ‘standards’ survive, such as faster payments, BACS, debit cards and direct debits?  There is an ongoing drive to add new payment methods as the technology and consumer payment habits move forwards, this includes Paypal; Sagepay; Applepay; Amazonpay and Adyen amongst others. The question has to be, is the future going to be Alipay and WePay or something else entirely?  The answer may be ‘Yes’ to most of these, at least in the short term, but it highlights the necessity for any future technical architecture or system to be flexible enough and open enough to connect… to anything.

Another question to be asked is: What is the user interface going to be for the application architecture of the future i.e. how will customers want to interact with our banks and building societies?  Will it be via the web browser of a PC or a mobile app, or maybe via voice through devices such as Alexa?  Or will it be through a wearable, the next generation of Google Goggles or Microsoft’s HoloLens for example?  In a few years’ time customers could be interacting with us in ways that haven’t yet even been imagined.

The answer is that we may have to cater for all of them, or at least build in the capability that the interfaces of the future could plug into. The central core is the source of truth, the central calculation engine which ensures accuracy, reliability, consistency and immutable data associated with accounts, transactions, and balances. 

The interface is just the means by which connection is made to that central core, which is enabled via the provision of ever more sophisticated APIs enabling the customer or ‘user’ to communicate with us, usually via a computer of some sort.

New technology is progressing at such a pace that it is hard to look into the future and predict what it will look like or even what it can and will be used for. 

The technologies we can see forming already it may be hard to imagine being used in financial services, but that doesn’t mean they won’t be at some point. Augmented and virtual reality for example, or artificial intelligence, the definition of these is broad so the answer to any question is likely to be “yes, there is a possibility that these will be used in the future”.  This drives home the need for the connected architecture to be flexible and nimble enough to connect with the known and not yet know technologies of the future.

A question of trust

The question to be asked when looking at how we move our industry towards this modern, open, flexible and connected architecture, is what needs to be in place as the enabler for this to happen?  This key enabler is “trust”.

Without trust that the technological solutions which have been provided do what they say that they will and are secure, resilient and accurate, how will regulated enterprises feel that they can implement them?  Banks, building societies and other financial organisations need to be able to trust these IT solutions, the cloud platforms upon which they sit and the APIs which connect them. 

This trust is achievable because the commercial players in this ecosystem are all experienced companies who provide a comfort blanket which includes certification, audits, standards, insurance, indemnification, and contract terms.  Clearly this should help to mitigate any trust issues which may exist.

Contrast trust at the enterprise level, with trust between organisations and consumers in the connected world.  Consumers need to be persuaded to trust solutions and organisations which hold their personal, social, and financial information. This is not helped when they see in the press tales of woe associated with failed system upgrades, hacking and their personal data up for sale on the dark web.

In an Open Banking world, enterprises and consumers alike have a challenge to achieve all the perceived benefits, especially as GDPR requires affirmed consent, i.e. trust.


It would be lax in a commentary on immutable data and trust not to mention Blockchain, at least in passing.  The concept of Blockchains should be a byword for trust, providing, as they do, proof of work, effort or stake, immutable or unchangeable data and the solution of the “Byzantine General’s Problem” where a fault presents different symptoms to different observers. However, it seems that commercial Blockchain solutions are consistently coming “next year”.

A look at the future of technology within the financial services sector shows it will be underpinned by a core of technological excellence generating trusted, immutable data.  This will be connected via open architecture operating in an environment where trust exists in all of its guises to allow a future of speed, low cost data rich solutions, enabling accurate decision making for the benefit of financial services institutions and consumers alike.

Media contact

Debbie Staveley
Director and Owner,
bClear Communications

+44 (0)1275 542 511


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