Composable architectures in financial services – The basics
This is the second of a series of posts exploring modern IT application architectures in financial services, why these trends are emerging and how they can enable business innovation and transformation. In this post, we explore what important assets and preconditions need to be in place to move to a composable architecture.
Background
When moving away from large monolithic applications to a composable architecture, it often means having multiple smaller applications with a specific, more narrow functional scope. One benefit of this is of course improved opportunities to avoid duplication of functionality – for example, there is only one core ledger instead of separate, partly overlapping applications for landing and deposits.
However, the nature of the modern composable applications is different from what we typically see in legacy environments in banking and insurance. They are typically API-only and designed for real time processing. This places new requirements on the overall architecture – these applications need to be supported by an environment which enables them to function well. Here, we call that environment a “composable architecture fabric”
The composable architecture fabric
The fabric is a run-time architecture providing several important features, as listed below.
- Cloud platform supporting orchestrations and CI/CD management
- Master data management which can be custom built, or COTS based
- Integrated application-level logging and error handling
- Compliance reporting and IT controls support
- Authentication and integrated authorization
- Real time event streaming support
- API integration and management – ideally BIAN based
- Operational data stores
This run-time environment is also often supplemented by a standardized cloud environment for development and deployment of custom-built applications such as portals, digital front ends, AI and analytics.
Creating a composable architecture fabric represents a major investment but will provide cost savings and faster time-to-market in the longer term. However, leading IT players – including Deloitte – has invested heavily in such fabric environments as well as ready made business applications to complement composable COTS solutions.
Our next post will showcase examples of actual composable architectures in banking and insurance – stay tuned!
