Ant Financial has officially become a gold member of CNCF, the cloud native Computing Foundation, a world-renowned open source organization. Why does Ant Financial embrace open source, and how can tech companies and open source communities achieve win-win and sustainable development? Hu Xi, ant Financial’s deputy CTO, wrote a column on TechCrunch explaining his views.
Since its inception, open source software has effectively promoted technology diffusion, openness and fair competition in many industries. Financial services, however, have been a rare exception: financial institutions still tend to develop and operate using proprietary technology.
Traditionally, the financial services industry served only a few people. Two billion people and 200 million small and micro businesses around the world do not have access to basic services such as banking and credit. Under such circumstances, open source technology may be the key to promoting financial inclusion.
Gartner reported that IT spending in the banking and securities industry grew 4.6 per cent in 2018 at constant exchange rates. Banks and securities firms remain firmly committed to putting digital transformation at the forefront of their future growth. For the most part, though, it is the big global banks that have the ability and resources to invest in technology. Smaller regional banks don’t have that opportunity.
Small banks, such as those from developing countries and rural areas, often lack technical expertise and the cost of building contemporary information technology systems, such as next-generation databases, advanced distributed computing architectures and finance-grade artificial intelligence. However, these organizations can better serve their markets if they are willing to leverage crowdsourced, low-cost, open source innovation.
The establishment of the Fintech Open Source Foundation (FINOS) is an important step in this direction. The foundation’s members include 10 of the top 30 US banks by assets under management, such as Goldman Sachs and jpmorgan Chase.
For the same reason, Ant Financial joined the Cloud Native Computing Foundation (CNCF) as a gold member. Silicon Valley-based CNCF manages key parts of the cloud native software architecture, including Kubernetes and Prometheus, and is the leading open source organization of the Linux Foundation. By sharing our technical knowledge with CNCF and its affiliates, Alipay is committed to opening up our technology to global financial institutions and partners, while working with China’s regional and rural banks to provide products based on proven open source technology to facilitate their digital transformation.
Alipay, founded in 2004, pioneered a secure and reliable payment system in China. Since then, Alipay has grown to offer a wide range of services, including payments, microfinance and insurance, to millions of small and micro businesses.
We are providing technical assistance to the industry to improve efficiency and reduce costs for more than 200 financial institutions. These include more than 100 banks, more than 60 insurance companies and more than 40 fund companies and securities firms across China.
Building on years of experience serving mission-critical financial apps like Alipay, Ant Financial has launched several open source projects, such as Ant Design, a popular UI Design language, and SOFAStack. The latter played a key role in helping users successfully participate in the Event. Singles day is the world’s largest shopping festival in terms of transactions.
With SOFAStack, businesses of all sizes can easily achieve the scale and reliability of Alipay, shifting their focus to how best to serve customers during peak shopping periods.
Through SOFAStack’s open source, we have helped partners like Bank of Nanjing build strong technology systems. With the help of SOFAStack and other open source technologies from Alipay, Bank of Nanjing recently developed a next-generation core banking system called Xinyun + for itself and third-party partners.
Xinyun + brings strong performance, flexible scalability, strong data consistency and an important disaster recovery mechanism. By the end of 2018, Xinyun + had signed up nearly 10 million new customers and increased its daily loan application processing capacity tenfold, from 100,000 to 1 million. As a result, the loan approval process has been speeded up, with some customers receiving loan approval in less than one second. At the same time, the cost of managing a single account has fallen by 80-90 per cent.
Benefiting from open source technology, Xinyun + brings better experience to customers while accelerating technological iteration and innovation.
Last year, open source celebrated its 20th anniversary. Over the next decade, the latest and most critical application of open source technology may be to transform financial services to make them more accessible around the world.
Ant Financial and our open source projects are excited to be a part of this global technology community, and we hope these projects will bring more equal opportunities to the world.
