Large organisations that once dominated the financial services industry have been facing disruption from smaller, leaner fintech companies for some time now. These disruptors are successful in doing so by improving their technological agility, specialisation and the ability to scale and pivot their applications.

In the face of rapidly changing customer, business and regulatory requirements, financial services companies need to be able to increase their response time to address this. Many businesses have migrated from a centralised, multi-tier architecture where entire applications were created on a single codebase, to a microservice-based infrastructure. The centralised model was the preferred choice when desktops ruled, however this has changed radically with the use of multiple platforms and devices.

Microservice-based architecture brings a lot to the table when it comes to application scalability and has been particularly relevant for companies managing the shifting business landscape during lockdown. Its versatility and flexibility made it perfect for developing products that required quick changes and new functionalities on the fly. It also allowed for the development and deployment of services independently without having to make major changes to the entire system.

Wonga is one organisation that maximised the benefits of microservices during the lockdown period. “Our origins as a FinTech disruptor were based on the idea that new technologies could bring massive improvements in the way that our customers are served,“ explains Simon Murison, Head of Product at Wonga. “Microservices is an architectural style in which applications are broken down into smaller components, and these fine-grained services made it easier for us to develop, test and deploy applications, and most significantly, to change and maintain them.”

Murison does however caution that microservices is not for every business and Wonga has faced a few hurdles. He explains that they had to adopt a devops culture and train their teams to work cross-functionally - where everyone was responsible for service provisioning.

“We had to re-align our processes and people to best optimise how we used technology to service and grow the business,” he explains. “In addition, our strategy shifted from holding all expertise and engineering in-house, to adopt a ‘hub and spoke’-based partnership approach which enabled us to leverage expertise that span the full FinTech realm on the tech and business side.”

“In addition to being able to develop applications that provide consistent user experiences across a wider range of platforms, there are many other benefits to our new business approach,” he says. “These include increased resilience, improved scalability, easier maintenance, simpler testing as well as being able to ensure a continuous, uninterrupted experience for our users.”

“Our role as partner service coordinator is typically undervalued in traditional FS circles,” continues Murison. “This way, however, third party organisations are able to innovate more effectively in their respective fields, and we can leverage external expertise into our own products, offerings, and technologies.”

The success of Wonga’s new model was evidenced in its response to the Covid-19 pandemic and consequential lockdown restrictions. During the initial stage of lockdown, several lenders suspended lending services and there was immense uncertainty about how the economy and market would react. According to Murison, a number of changes were made to loan terms, decisioning and communications, however the business was able to respond to and adapt as and when new data became available.

“Stakeholders from both tech and commercial backgrounds were able to bring their experience to bear, and collaborate efficiently with our third party service providers,” says Murison. “We critically continued to lend throughout this period while managing our risk, and adapt to a rapidly changing marketplace during the various levels of lockdown.”

Murison explains that Wonga has retained many of these changes and adaptations into lockdown level 1, and has subsequently been able to introduce new changes rapidly with these learnings in focus.

“The tangible outcome is that we are able to respond quickly and efficiently to changes and adaptations during a time that is particularly tough on businesses and consumers, which is precisely what people are looking for during times of uncertainty,” he concludes.