Open source as key driver for FS, but lags in governance and executive leadership

By Gaia Lamperti

On the occasion of the Open Source Strategy Forum conference held in London this week, the non-profit FINOS released the results of the 2021 State of Open Source in Financial Services Survey, conducted in partnership with the Linux Foundation Research, Scott Logic, Wipro and GitHub.

The report evaluates key aspects of open source adoption in the financial services industry across leadership, consumption, contribution, governance, and culture.

In particular, one key insight was that despite 69% of financial technology leaders saying that open source consumption increases productivity, many financial firms exhibit a lack of understanding about the role of open source within their business and governance strategy. When asked about whether organizations were “open source first” in the survey, 75% said “no” or “they didn’t know,” while only 8% of respondents have policies that encourage it.

“The results are clear, if financial industry leadership fully commits to open source and fosters a culture of collaboration within their companies, they can expect to make a positive impact on their business and the entire industry,” said Gabriele Columbro, Executive Director of FINOS. “It should be a strategic technology pillar for this industry, like Cloud or FinTech. While we have seen the outlook on open source drastically improve in the last few years, across a historically closed industry, we still need dedication across all leadership levels at financial institutions and FinTechs to build a truly open financial ecosystem to ultimately deliver the much-needed next-generation technology stack the industry requires.”

The survey engaged with over 300 key stakeholders at the intersection of open source and financial institutions, including developers, IT leaders, executive management, security, legal, procurement, and HR. The global survey centred on various questions related to trends and concerns, usage, and governance about the financial services industry’s open source environments and was conducted from June 1 to July 26, 2021.

The findings confirmed the prevailing view among many in the financial community: despite open source adoption in financial services being widespread, there is a huge opportunity to leverage it to make gains in efficiency and innovation. Much still needs to be done about formalizing policies and developing the strategy across the financial services sector.

“There’s clear enthusiasm for open source in financial services, but the survey has also identified the concerns that constrain its adoption in this highly regulated sector,” commented Colin Eberhardt, CTO at Scott Logic, a software company. “I’m greatly encouraged because this is a solvable challenge. Tried-and-tested policies, processes, and tools already exist that financial institutions can use to break through these barriers and benefit from the innovation that open source software and standards deliver.”

Key findings from the report:

• At least 80% of respondents agreed or strongly agreed that innovation, reduced time-to-market and total cost of ownership are now recognized as key reasons for financial services firms to engage in open source;
• Although open source leadership is still becoming part of business operations at many firms, fully 58% of respondents attested that they have a policy around consumption that allows it to some degree;
• The application of open source development  and governance practices inside an organisation is a growing trend with 59% indicating that they or their colleagues contribute to work-related software projects that are open to their business unit or to their entire company;
• Around 32% of the respondents either don’t know if their organisation has a policy or assert that it does not have a policy;
• While still far from ideal, women are better represented (6.86%) in the financial open source community than in the open source community at large (3.17%), when compared to the FOSS contributor study.