{"id":10067,"date":"2021-08-31T22:33:15","date_gmt":"2021-08-31T21:33:15","guid":{"rendered":"https:\/\/ee.yelkdev.site\/?p=10067"},"modified":"2023-09-21T23:37:18","modified_gmt":"2023-09-21T22:37:18","slug":"6-reasons-why-banks-finance-should-embrace-event-driven-architecture","status":"publish","type":"post","link":"https:\/\/www.equalexperts.com\/blog\/our-thinking\/6-reasons-why-banks-finance-should-embrace-event-driven-architecture\/","title":{"rendered":"6 reasons why banks & finance should embrace event driven architecture"},"content":{"rendered":"

Increasingly, banks and financial organisations are defined by two things: their technology, and that technology\u2019s ability to facilitate the highest quality\u00a0 customer experience.<\/p>\n

Technology and customer experience are inherently connected. Speed of service, security, the flexibility to create and deliver value based on a person\u2019s context or real-time interactions; these are some of the hallmarks of leading CX.<\/p>\n

They\u2019re also some of the reasons why event-driven architecture is a compelling solution for both large scale banks and start-up fin-techs alike.<\/p>\n

Let\u2019s look into six detailed reasons why digital banks<\/a>, government authorities, and other financial institutions around the world<\/a> are embracing event-driven architecture.<\/p>\n

1 \u2013 Scale technical infrastructure in response to high demand; quickly and cost effectively.<\/h2>\n

Banks and financial organisations typically deal with huge volumes of activity, and high-throughput requirements.<\/p>\n

Depending on the scale of your organisation, enormous numbers of transactions, eKYC checks, risk analyses, and other micro-interactions will likely occur every hour.<\/p>\n

If you\u2019re reliant on a monolithic architecture, scaling to accommodate peak periods or fluctuations in demand typically represents a challenge for engineers, a strain on existing resources, or a significant cost for your organisation. Or all three in combination.<\/p>\n

Imagine experiencing a wave of transactions that represent a 100% increase on your typical processing power. This likely creates a huge strain on services.<\/p>\n

In a synchronous blocking scenario, response times will inevitably balloon as requests are pushed downstream through a chain of increasingly overwhelmed services.<\/p>\n

With an event-driven architecture, you can easily build out multiple microservices to service the same stream of requests. These services operate through a receiver-driven routing<\/a> pattern; in other words, each service will only pull a request from the queue if it is ready and available to complete its function.<\/p>\n

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Synchronous processing<\/h3>\n

In synchronous or linear processing, response times can grow as requests are pushed downstream through a chain of increasingly overwhelmed services.<\/p>\n

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Event-driven processing<\/h3>\n

In contrast, event-driven processing is \u2018receiver-driven\u2019. Each microservice pulls from the queue as it is capable of processing requests, meaning many services function together to make light work of high volume periods.<\/p>\n

2 \u2013 Adapt to change\u2014almost instantly\u2014and respond to key drivers in market.<\/h2>\n

In a competitive financial sector\u2014where startups are establishing a foothold and accruing greater market share\u2014the ability to respond and create value quickly is crucial.<\/p>\n

Unfortunately, for many large-scale banks, technical infrastructure is a source of constraint, rather than driving the change and potential we see in digital banks.<\/p>\n

Event-driven architecture gives you the ability to respond to change rapidly, thanks to a couple of key factors.<\/p>\n

Firstly, an event-driven architecture is typically comprised of decoupled microservices<\/a>. By decoupling\u2014and reducing chains of interdependencies between services\u2014you reduce the potential impact and risk associated with testing and deployment processes. Reducing risk and effort involved in deployment, while maintaining quality assurance, means you can act faster to improve customer experience.<\/p>\n

Secondly, an event-driven architecture allows you to quickly and easily create new services that leverage existing data streams.<\/p>\n

In other words, you can rapidly spin up new services<\/span> for evolving use cases as they become apparent or\u00a0appealing.<\/p>\n

Let\u2019s consider a hypothetical scenario. Imagine your business intelligence team identifies a series of accounts sending potentially problematic transactions to an offshore bank. In this scenario, you could immediately create a new microservice to monitor for any transactions going to that bank, and fire immediate notifications to your risk analysis team for additional monitoring of the accounts associated with those transactions.<\/p>\n

Almost immediately, you protect your organisation\u2014and customers\u2014against the risk associated with potentially fraudulent transactions.<\/p>\n

You can<\/i> do the equivalent in a monolithic architecture, but you\u2019d have to plan everything ahead of time: mapping use cases, establishing how information will be used, where it will be sent, and more.<\/p>\n

Engaging in that painstaking planning makes you slower to respond to the needs of your customers. Or, in the above example, slower to eliminate risk.<\/p>\n

3 \u2013 Surface data to a range of distributed business domains for comprehensive real-time views of customers and operations.<\/h2>\n

Event-driven architectures create an incredible ability to consolidate multiple flows of information in real time.<\/p>\n

In many cases, this can create visibility of issues or opportunities that are otherwise unidentifiable across large organisations with multiple domains.<\/p>\n

Consider the following hypothetical:<\/p>\n