The Biggest Impact of Microservices on Digital Banking

22 Jun, 2021 . 4 minutes

Customer-first and digital-first have become key to the survival of any financial enterprise. Customers' trust in banks is based on their experiences and they make their banking decisions accordingly. Therefore, the digital banking industry is striving to create a more responsive customer experience. Driven by the need to deliver new digital services at an unprecedented speed and scale, several banks have started to leave the monolithic IT environments behind to embrace microservice-based architecture.

However, are brand-new microservices really adding any advantages to digital banking services? And if so, to what extent can microservices affect the digital banking industry?

What is microservice-based architecture?

Microservice-based architecture, also known as microservices, has been in use in many industries, from IT and entertainment to e-commerce and digital banking, since 2010.

A microservice is an approach to developing software in which applications are divided into separately hosted parts – autonomous from one another. This means microservices break free from the traditional way of dealing with apps as one software component, as they provide an entirely independent approach while all pieces still work together to complete the task.

Microservices also signify smaller IT services that are easier to deploy and control, which allow enterprises to develop new applications or update existing ones more quickly than monolithic architectures. One of several characteristics of microservices is that each has its own data model and controls its own data. Microservices also use "dumb pipes," such as an event broker and a light protocol like REST, to move their data and a small scope that covers a single piece of business functionality.

What is the advantage of microservice-based architecture for digital banks?

Microservice-based architecture has grown rapidly despite having been developed just a few years ago. Some large companies, such as Facebook, Google, and Netflix, have used microservices as their new architecture.

Surely, microservices have many benefits that attract large companies. How about microservices for digital banking?

The benefits microservices offer to the digital banking industry are:

●  Microservices increase fault tolerance and fault isolation

Microservices can have a higher fault tolerance as they are loosely coupled. Hence, when a certain failure occurs, it will not interfere with other services in the application. Furthermore, microservices allow us to locate and isolate problems easily as we only need to detect one module, which means it can reduce the time needed to resolve the problem.

●  Microservices escalate for more team autonomy

The microservice-based architecture allows teams to build numerous projects simultaneously. Therefore, new features can be applied without waiting for many teams to sequentially complete their specific work. Also, increased team autonomy can resolve the issue of productivity and speed and allow banks to provide new digital services more quickly.

●  Microservices assure flexible data storage

Microservices allow companies to store data differently, with developers free to choose the most suitable storage type to support the needs of each service.

To what extent can microservices affect the digital banking industry?

Competition between companies in the digital banking market is currently very tight as banks vie for customer loyalty and retention. Therefore, to attract customers, companies need a weapon that puts them ahead of the competition by delivering a better, smarter, and simpler customer experience. This microservice-based architecture can give banks the flexibility to deliver intelligent digital services to customers quickly.

Microservices are designed to innovate with ease and constantly build large-scale as well as up-to-date apps, assure more frequent updates, faster recovery, and reduce the possibility of failure. Microservices can also give companies that use an edge over their rivals still relying on traditional architecture.

Furthermore, by using microservices you can now allow your designers, software developers, marketing specialists, and business managers to work together and deliver the business value your customers expect. Microservices, therefore, will be the cornerstone of digital banking as they ensure progressive and continuous modernization.

Sign up for the newsletter

By submitting this form, you acknowledge that you have reviewed the terms of our Privacy Statement and consent to the use of data in accordance therewith.

The APEXX Payment Orchestration Platform is the last integration you will ever need

Lowest cost
We structure ourselves to operate in the most efficient way. We are not an additional cost as we take the place of the payment gateway.
Lead in Orchestration
We enhance the payment experience by driving up acceptance rates thereby reducing friction and lost sales for our Merchants.
Excellent Customer Support
The APEXX Payment Orchestration Platform is architected to the highest industry standards of security and support ensuring that our merchants have the best protection and support access at all times.