The past few years have seen tremendous growth and evolution in the finance industry’s adoption of open source technologies and practices, and open source has moved from being merely a cost-saving measure to a strategic imperative for financial institutions of all sizes, writes the Fintech Open Source Foundation (FINOS) in a report outlining its 2025 priorities.
What started as an initiative led by the largest tier 1 investment banks in the world has now turned into a truly bigger tent including all constituencies of the ecosystem, from buy-side to intermediaries like clearinghouses and exchanges, from the top cloud service providers to long established trade associations.
“The financial sector has realized that open source is a positive sum game, whereby working together on non-differentiating technologies they can create more value for everyone while freeing up resources to focus on their unique competitive advantages,” according to the report.
One of the most significant trends FINOS identifies is the increasing recognition of the business value that open source brings to financial institutions. Its 2024 State of Open Source in Financial Services Report highlighted that 84% of respondents agree that using open source software (OSS) delivers business value to their organizations.
Financial institutions are now leveraging open source to:
- Accelerate innovation and time-to-market: By tapping into a global pool of talent and pre-existing
solutions, firms can develop new products and services faster than ever before. - Improve software quality and security: The collaborative nature of open source development leads
to more robust, well-tested code that can withstand the rigorous demands of the financial sector. - Enhance talent attraction and retention: Top developers are increasingly drawn to organizations that
embrace open source principles, giving firms that actively participate in the open source community
a significant advantage in the war for talent. - Foster greater collaboration and interoperability: Open standards and shared platforms are breaking
down silos within and between organizations, leading to more efficient operations and better
customer experiences.
In 2024, FINOS expanded its global member base by 20%, adding organizations such as NVIDIA, BlackRock, Protect AI and Moody’s, with initiatives including the release of an AI Governance Framework and the adoption of FDC3 interoperability standards.
In partnership with the International Swaps and Derivatives Association (ISDA), the International Capital Market Association (ICMA) and International Securities Lending Association (ISLA), FINOS has continued to advance the Common Domain Model (CDM) as a standardized representation of trade events and actions. This is proving invaluable for regulatory reporting, risk management, and operational efficiency.
ISDA’s Digital Regulatory Reporting (DRR) built on CDM has gained traction, and there’s also a push into collateral management.