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Standing on the shoulder of giants: How Australia’s fintechs can tap into open source
Borrow
Standing on the shoulder of giants: How Australia’s fintechs can tap into open source
Australia has developed a vibrant fintech scene, which, in one year alone, grew by a staggering 37 per cent. The surge has ushered in a new era of financial products and services, from fully online home loan comparison services to bespoke financing to pay for school fees and everything in-between. These innovative solutions have the potential to disrupt age-old finance models and challenge existing players to keep pace with new innovations.
Standing on the shoulder of giants: How Australia’s fintechs can tap into open source
Australia has developed a vibrant fintech scene, which, in one year alone, grew by a staggering 37 per cent. The surge has ushered in a new era of financial products and services, from fully online home loan comparison services to bespoke financing to pay for school fees and everything in-between. These innovative solutions have the potential to disrupt age-old finance models and challenge existing players to keep pace with new innovations.
But how can these newer companies accelerate their growth in a fast-evolving, digital world? The answer lies within open source code and the culture of collaboration, which has the power to revolutionise the industry.
Open source values will underpin the ‘new’ finance industry
Innovation, collaboration and transparency are core values of open source. These values are critical for this newfound era in the finance industry, and the results from organisations and industry bodies that have adopted these are materialising. For example, open source forums were recently used as a means to collect feedback by the open banking Data Standards Body. This new approach was drawn from the findings of the banking royal commission and open banking standards, which has given consumers greater access and visibility over their data and personal finance.
Such a level of transparency, openness and collaboration is a far cry from the traditional “behind closed doors” approach, which included written letter tenders that were not open for public scrutiny or trail commission structures that were not disclosed or regularly reviewed by clients. Fintechs and established players alike are recognising the benefits of embracing these values and clearly communicating the details of their products and services. For example, neobank Xinja published a full roadmap of upcoming features and hosts a community forum to encourage feedback – practices that are aligned with open source way of working.
While a handful of fintechs are showcasing the possibilities of open source by releasing digital-first services that have collaboration, innovation and transparency ingrained in the product’s DNA, there’s a lot more to be done in the industry that once relied on pen and paper. Only just now has open banking become a reality. According to the Australian Competition and Security Commission (ACCC), as of the launch on 1 July, two financial institutions have been accredited, with a further 39 currently undergoing the process.
Consumers will soon have the ability to request their personal information, and financial institutions will be able to share details between organisations freely, providing more personalised services. For an industry on the cusp of serious transformation, the new open banking regulations have opened the playing field for fintechs and established institutions alike.
Collaboration and innovation will flourish with open source
Adopting open source collaboration and software development best practices will enable fintechs to bring products to market quickly and effectively. Starting from scratch is not an option in such a fast-moving and competitive environment.
Open source unlocks the ability for financial organisations to build on and innovate using existing projects, effectively standing on the shoulders of giants. In the case of Xinja, the team recently partnered with Kong Enterprise, leveraging open source technology to break into new markets with unrivalled speed. Furthermore, financial organisations of all sizes see the value of participating in open source communities, such as The Fintech Open Source Foundation (FINOS), to power the ideas of tomorrow.
As we consider the development of cutting-edge products and speed to market – while heeding the parameters set by the royal banking commission – it’s paramount that development teams remain transparent and collaborative. This is especially important as the room for error is reducing and accountability to the community is growing.
Securing open source software
As fintechs and mature enterprises move towards this vision, leaders will inevitably turn their attention to security and seek to understand more about open source. This is especially true as the industry leans towards a more collaborative and transparent way of operating. Security concerns are heightened in the finance industry, particularly with regards to sensitive customer data. It is understandable then that almost two in five IT leaders cited security considerations as a key factor when deciding when and how to use open source. While there may be some confusion about the security of open source, IT leaders that leverage open source effectively cite that they have better security within their organisations as a result.
Any and every discussion about security must be grounded in the fact that it is a shared and collective responsibility. All too often, security is handled in a manual or ad hoc nature, disconnected from typical workflows. No single team or individual can be tasked to secure code alone; rather, security must be a shared responsibility that is ingrained throughout the software development process. By embracing a “shift left” approach – where organisations bridge the gap between developer and security teams – security flaws can be identified and resolved more quickly, leading to faster time-to-market.
These security measures will ensure that fintechs, and mature enterprises alike, can continue to use open source safe in the knowledge that their code is protected and secure.
Open source signals the future for the fintech industry as transparency, openness and collaboration propel the most innovative organisations. As Australia’s fintech scene continues to grow and mature, open source will empower businesses to iterate and develop software more quickly and securely.
Sam Hunt is the VP APAC at GitHub.
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