We spend a lot of time talking and thinking about financial technologies and products. Almost all of them have been developed by private companies — fintechs and incumbents alike. But there is a vibrant – and growing — open source movement in finance. One that probably doesn’t get enough daylight.
My guest today on the show is Gabriele Columbro, the executive director of FINOS, the Fintech Open Source Foundation.
Gabriele has a lot to share about the work being done behind the scenes to create standards, ecosystems, and open developer platforms. He’s is an old hat in the open source world and geared up over the potential for innovation in the financial industry.
The following excerpts were edited for clarity.
What’s the current status of open source in the financial industry?
The tl;dr is that open source is financial services is very much on the rise. It has changed drastically even in the last two years as I’ve run the Symphony Software Foundation, now FINOS. I have to say that the readiness and appetite for this industry to embrace open source and open collaboration has drastically accelerated.
I come from a life in open source and certainly from my perspective, open source has fueled pretty much every piece of innovation over the past 15 or 20 years. If you think about cloud or big data or blockchain, all of these disruptive innovations came from open collaboration. From my vantage point, our foundation has the unique perspective of bringing together the largest investment banks — like Goldman Sachs, Morgan Stanley, and JP Morgan — but also the perspective of the younger, smaller fintechs leveraging open source. I’m finally seeing these two worlds collide.
What’s driving the financial industry’s uptake of open source?
There have been a few factors. The main driver is the many changes the sector is experiencing. Starting with the fintech wave, we’re witnessing the potential for disruption from completely decentralized technologies. The industry can access better talent. Combine that with the fact that margins aren’t what they used to be and the way this industry did software — it now wants to be like Silicon Valley.
Over the past two years, we’ve seen this additional pressure, and from the perspective of my board, we’ve already built a level of trust required to work in a collaborative way with your competitors. It’s a trend that’s almost unstoppable if you look at other industries. Now, we have executive buy-in from a cost reduction, talent acquisition, and innovation acceleration standpoint.
Why is open source so important?
It all comes down to being more efficient at building story. Our foundation is here to debunk the myth that open source equals free. If you look at how other industries have approached this, open source isn’t about reinventing the wheel. It began as an individual movement by people who wanted a better way to build software, emphasizing the freedom and sharing of information.
Over time, open source has turned into a strategic approach to building technology. For many reasons, like regulatory complexity and a fear of IP leakage, financial services may be behind the open source curve. As the industry transforms and realizes it’s a technology-driven industry, it’s about embracing the models that have made Silicon Valley successful.
There’s also a cultural-generational aspect here, too. I refer to Millennials as the GitHub Generation. They’ve grown up knowing this is how you do software. As this industry attracts this talent, it needs to find a way to help these people foster their own portfolios and give back to the community.