Is your core cloud-native or just relocated legacy tech?

Once upon a time, not too long ago, financial institutions used to have secret rooms behind lock and key where the servers dwelled.  As it was usually the only properly air-conditioned space in the building, the server team would find endless reasons to do a little server maintenance on the hottest day of the year. But then they were also the same team who would lose their weekends and evenings to support the pizza boxes that kept the business online – ensuring that capacity was monitored and new boxes were ready to go when needed.  These same engineers would be woken from their slumber when a utility company cut through a power or telephony cable in the dead of night to trigger disaster recovery protocols.  What precarious fun it was!

Using on-site servers not only required huge amounts of human support, power and resources but also determined how code could be written.  And despite companies replacing their on-premise servers with cloud technology, they often have not updated their legacy systems to take advantage of all that the cloud can offer.

Legacy core banking systems that have been shifted to the cloud are based on traditional architectures and relational database technology. The first wave of cloud-first core banking platforms also made use of this type of technology, albeit running on cloud-based servers. The problem with relational database technology is that it represents a major bottleneck in terms of scalability and performance and becomes completely overloaded because they are trying to process new transactions at the same time as serving a massive range of queries. So although the system is running in the cloud, ultimately it is quite slow and expensive AND is not designed to retain a historic view of an account as its state changes over time. Compromises have to be made in relational database systems in terms of what data will be retained as part of an account update and what can be discarded.

However, as part of the adoption of cloud, next-generation cloud technology and architectural patterns have emerged. This includes concepts such as microservices, event streaming, noSQL databases, containerisation and serverless functions which represent the building blocks for a cloud-native core banking system; something that is optimised for the cloud.  And this is where the magic happens.

So where the first generation of cloud core banking systems took technology and architecture from the nineties and noughties and ran it in the cloud they haven’t come close to leveraging the true benefits of cloud computing. It is important to understand if your provider simply moved their systems to the cloud or created a cloud-native solution. We at SaaScada are leveraging the huge advances made over the past decade in public cloud, largely driven by new architectural practices and technology born out of massive consumer-focused technology products – Facebook, Uber, Deliveroo, Netflix, Spotify. Disruptive innovation has occurred in this space and we are using it to super-charge the way core banking technology is built and delivered.

SaaScada is based around a few key concepts that are quite revolutionary in the way that a core banking ledger operates. First, we separate the execution side of our system from the querying side. This approach is called command query responsibility segregation (CQRS) and it allows us to optimise the read and write operations on our platform independently.  Our ledger is based on noSQL technology – it’s blazingly fast and completely optimised for carrying out operations within the context of a single account. Anything that happens on the ledger is published through our event processor and picked up by the read side of the system which organises the data into views known as data projections which can then be used to execute a variety of queries across all accounts on the platform.

Because data storage is cheap we often store the data in multiple formats optimised for different query scenarios. This gives us the best of both worlds – a high throughput, resilient transactional ledger and a dynamic querying approach. On the query side of the system, we work with our customers to understand their data needs and develop data projections that provide them with the exact information they need, all accessible through our API.

However, the true power of an event-driven core is that we make the same event stream we use internally available to our customers. What we see on a daily basis is that this transparency and unrestricted access to real-time data drives innovation across our customer base because it unlocks their ability to build engaging experiences. When you combine transactional insight with information from other systems in the ecosystem the opportunity to build truly personalised experiences becomes a reality.

None of this would be possible if our technology had simply been repurposed and moved to the cloud. Being a genuine cloud NATIVE solution has enabled SaaScada to fully leverage all the benefits modern cloud computing has to offer. 

So when you next look at solutions that are in the cloud – it is important to consider if that solution was created in the cloud or simply old technology moved to the cloud. That key differentiator can determine your ability to innovate and beat the market.