APIs and Microservices in Financial Infrastructure: Benefits and Challenges

Fintech companies are constantly looking for ways to improve their technology infrastructure to increase efficiency and provide better services to their customers. One of the modern approaches is the use of APIs and microservices.

These technologies enable the development of flexible and scalable systems that can quickly adapt to changing market requirements. In this article, we look at what APIs and microservices are, what their advantages and disadvantages are, and discuss best practices for implementing them in financial brokerage infrastructure.

API (Application Programming Interface) is an interface that allows software applications to interact with each other. In the context of financial brokerage firms, APIs can be used to integrate various services such as trading platforms, analytical tools and customer databases.

Microservices is an architectural style in which an application is developed as a collection of small, independent services, each of which performs a specific task and interacts with other services through an API. This approach differs from monolithic architecture, where all system components are integrated into a single application.

Benefits of using APIs and microservices

Business benefits

Create new products. APIs open up opportunities to develop new products and enable companies to expand their range of services and adapt to changing market requirements. For example, trading APIs can significantly increase trading volume, resulting in higher commission income and overall trading volume. This is particularly relevant for brokerage firms that want to increase their profitability and competitiveness.

Simplified integration. APIs create an environment for developing new products and simplify the process of integration with other systems. This is particularly important in the context of rapidly changing technologies and customer needs. In today’s world, where speed of adaptation and change are critical success factors, the ability to quickly integrate new solutions plays a critical role.

Development of integration approaches. Traditionally, integration was performed using a “pull” approach, where a component waited for an event on the data bus. In modern conditions, microservice architecture is shifting to a “push” approach, which allows for more effective response to events and improves system reliability. The combination of “push” and “pull” approaches ensures a more flexible and resilient infrastructure that can adapt to different usage scenarios.

Increased flexibility and scalability. Microservices allow companies to more easily scale their systems by adding or changing functional components without having to change the entire application. This is particularly useful for brokerage firms that are frequently faced with changing market conditions and need to adapt to them quickly.

Customer benefits

• Improved service quality: By using APIs and microservices, companies can respond more quickly to customer requests and offer higher quality and more personalized services. For example, automating processes via APIs can reduce request processing times and improve user experience.

• Simplified access to services: APIs allow customers to easily integrate with the company’s systems and provide access to necessary data and services. This simplifies cooperation with the brokerage company and makes its services more attractive for customers.

Challenges when using APIs and microservices

Security

Complexity of auditing. Microservices often use open source libraries, which makes security auditing difficult. Comparing the modern environment to an anthill with millions of ants (microservices) constantly moving around highlights the complexity of ensuring security. It is important to not only track each library, but also update it regularly to eliminate vulnerabilities.

Need for modern network infrastructure. Enterprise networks need to be modernized to support microservices that generate large numbers of requests and TCP sessions. This requires careful management of NAT rules and constant monitoring of network activity. Without proper modernization, the network can become a bottleneck, hindering the operation of microservices and affecting overall system performance.

Maintaining reliability. Microservices, by their nature, introduce certain operational disruptions, and ensuring their reliability requires the use of watchdogs that monitor event streams and refill missed calls. This enables stable system operation even under high loads and individual component failures.

Data protection. Since microservices process large amounts of data and often interact with different sources, ensuring data protection becomes a top priority. To protect data at all stages of processing, modern encryption and authentication methods must be implemented.

Network aspects

Network resource management. As the number of microservices increases, the need for effective network resource management grows. In order to avoid overloading the network and ensure stable operation of all components, reliable routing and load balancing must be ensured.

Monitoring and diagnosis. In a microservice architecture, monitoring and diagnostics become more complex tasks. To track network status and quickly identify problem areas, specialized tools are required. This enables timely response to incidents and minimizes downtime.

Ensure performance. Microservices can cause significant network load due to the large number of API calls and active data exchange. To ensure high system performance, it is important to optimize network resources and apply methods such as caching and data compression.

Software architecture

Dependency management

Version monitoring. It is important to know the versions of all components used in the system. This is necessary to ensure compatibility and quickly resolve vulnerabilities. Regularly updating components and monitoring their versions helps keep the system current and secure.

Configuration management. Each microservice environment must be precisely configured, which requires significant effort in configuration management and monitoring. Automating configuration management processes helps reduce setup time and minimize the risk of errors.

Ensure compatibility. Microservices often rely on various external services and libraries, so ensuring compatibility is crucial. The system must be regularly tested for compatibility of all components and any problems identified must be resolved immediately.

Continuous Integration and Delivery (CI/CD). To effectively manage microservices, it is important to implement continuous integration and delivery processes. This enables rapid deployment of updates and new features, ensuring high development speed and timely response to changing requirements.

Reliability and fault tolerance

Resource redundancy. To ensure high system reliability, resource redundancy is required. This includes duplicating critical components and using backup communication channels.

Automatic recovery. In the event of the failure of individual microservices, it is important to ensure automatic recovery of their operation. Methods such as automatic restart and migration of microservices to other nodes can be used for this purpose.

Monitoring and alerting. Monitoring and warning systems enable problems to be identified in a timely manner and responded to quickly. It is important to set up monitoring of all key system indicators and automatic alerts in the event of failures.

Diploma

Using APIs and microservices in brokerage infrastructure offers significant business benefits, such as: B. creating new products, simplifying integration and increasing system flexibility. However, it also poses serious challenges in the areas of security, network administration and software architecture management. Companies must approach the implementation of these technologies carefully, weighing the benefits and potential risks.

Effective use of microservices and APIs requires a comprehensive approach that includes modernizing network infrastructure, implementing modern data protection methods, and managing dependencies. Only with a competent approach to the implementation of these technologies can sustainable growth and development in the modern digital economy be achieved.