Finance sector undergoing revolution by open-source technology
Revolutionizing Wall Street with Open-Source Software
Open-source software is transforming the heart of Wall Street, providing a cost-effective, flexible, and innovative ecosystem for AI and data-driven financial solutions.
Fintech engineers and financial firms are collaborating on open-source, finance-specific tools, marking a significant shift in the industry's technological landscape. This collaboration is driven by the need for speed, adaptability, and talent retention, as competition in fintech heats up.
The amount of time engineers are spending on open-source contributions at work has doubled since 2021, reflecting the growing importance of these projects. This trend is backed by the increasing number of GitHub commits from financial services professionals. In 2021, there were 429,000 commits, which rose to over 751,000 in 2024, a roughly 75% increase.
The financial services community has embraced open-source software, with over 100 members now part of the Fintech Open Source Foundation (FINOS), including industry giants like Citi, JPMorgan Chase, Goldman Sachs, Morgan Stanley, AWS, Microsoft, and Google Cloud.
Open-source software is deeply embedded in Wall Street's core infrastructure, with global banking institutions using code they don't entirely own. This is evident in the widespread use of open-source standards like the Common Domain Model, a widely accepted open standard for harmonizing data for trading, reporting, and compliance.
Moreover, open-source software is facilitating the development of open APIs, such as the FDC3 standard, which enables applications from different vendors to talk to each other. This interoperability is crucial for fostering innovation and competition in the financial services sector.
The adoption of open-source software extends beyond just tools and standards. Firms are shifting contribution and open-source development from an exception to a norm, leaving more time and resources to focus on their unique offerings like user experience, artificial intelligence platforms, execution algorithms, and more.
Open source has become a strategic imperative for moving faster, building better, and attracting top engineering talent. It provides a platform for public code contributions to serve as portable, verifiable credentials, making it easier for engineers to move between companies and industries.
Standardized toolchains and common frameworks increase skills portability for developers, reducing retraining costs and making teams more productive. Open standards help reduce integration costs, improve transparency, and future-proof core systems in the face of changing regulation and technology.
The trend towards open-source software is supported by influential organizations like the Forbes Business Council, which encourages leaders within finance to contribute to open-source projects to shape and build them.
The U.S. government's endorsement of open-source AI frameworks for their "geostrategic value" also contributes to the growing adoption of open-source software in the financial sector. This promotes the use of open models aligned with American standards, indirectly influencing Wall Street firms relying heavily on cutting-edge AI technology for competitive advantage.
Firms such as OpenAI have boosted enterprise AI infrastructure demands by providing open-source AI models that require robust data management and on-premises deployment solutions. This stimulates Wall Street’s infrastructure modernization efforts while expanding options beyond purely proprietary tech stacks.
In conclusion, open-source software is integral to Wall Street’s core technological infrastructure. It enhances financial firms' capabilities in data analysis, risk modeling, asset management, and algorithmic trading, while benefiting from supportive policy and expanding AI infrastructure investments. This ecosystem encourages innovation and competition, reshaping financial services at a foundational level.
Ismail Amla, a key figure in fintech, is leveraging open-source software to drive innovation in business and finance technology, particularly in the development of AI and data-driven financial solutions.
Due to the increasing contributions of engineers from financial services firms to open-source projects on GitHub, it is expected that open-source software will continue to be a strategic asset for firms like Citi, JPMorgan Chase, Goldman Sachs, and Morgan Stanley.
