There is a common perception that banking organisations are slow to innovate, due in part to the historic systems on which they run being inflexible and resistant to change. As recently as July 2020, TSB in the UK were struggling with ongoing problems resulting from a major system upgrade.

Delivering major innovations for ‘brick and mortar’ banks is certainly challenging. The clunky integrations between siloed systems such as ATM networks, internet banking and the platforms used in-branch can slow down development, but is this picture of glacial change as a result of aged technology a true reflection of the banking world as a whole?

Fintech is often seen today as the marriage of financial services and information technology, but unlike the legacy systems of ‘brick and mortar’ banks, this is an open marriage based on the very latest technologies and delivery practises.

What Does Continuous Delivery Mean for Capital International Bank?‍

The first version of Capital International Bank was deployed for live testing on 1st December 2020.  This was the minimal viable product. Over the following months, before the regulator lifted all licensing restrictions on 27th May 2021, the bank was slowly opened up to more users, and their experiences were used to validate our product features and learn critical lessons about what our clients really wanted from our digital banking platform.

During this period, Capital’s team delivered a total of 65 new banking features, 61 major improvements and 803 fixes where the functionality fell short of expectations. While the average number of changes was over 5 per day, the majority of updates were made weekly, and major client facing feature releases were scheduled on a monthly basis. With this, it’s fair to say that the snail-pace of innovation the banking industry has come to be associated with is quickening; for us at Capital, it’s less glacial change, more speed of light! How did we achieve this? Keep reading to uncover our secrets.‍

Banking Technology Innovations Open the Door to Opportunities‍

The leading internet businesses across Fintech, gaming and other regulated sectors have one foundation in common: continuous delivery from cloud-based infrastructure. This is the foundation that Capital has adopted in order to bring the agility of best-in-class businesses to the world of corporate banking and investment services.‍

What is Continuous Delivery (CD)?‍

This is a software engineering approach in which teams produce software in short cycles, ensuring that the software can be reliably released at any time. For example, some digital retail banks release product enhancements every two weeks and most gaming companies update products daily.

The essence of this approach is often termed ‘agile development’. The diagram below shows a simplistic view of how the mechanism functions. Rather than the focus being on producing a final version of the product (a car in the example), the focus is on delivering a simple version that meets the user objective (moving from A to B). Only after that comes the regular refinement of the product based on an in-depth understanding of user needs.

This approach reflects the reality that it is almost impossible to define a complex product on day one with enough detail to satisfy the needs of the customer. It is better to use real customer feedback to determine the requirements and to iterate the product frequently until the customer is delighted with the product that is being offered.

The approach helps reduce the cost, time and risk of delivering changes, by allowing for more incremental updates to applications in production. Frequent update cycles – or having a high release velocity – is also the key to being responsive to client demands, which ultimately drives customer satisfaction.‍

The Benefits of Continuous Delivery Include:‍

• Accelerated Time to Market: Continuous delivery lets an organisation deliver the business value inherent in new software releases to customers more quickly. This capability helps the company to stay a step ahead of the competition.
• Building the Right Product: Frequent releases let the application development teams obtain user feedback more quickly. This means they can target their efforts toward only the useful changes. If they find that a certain feature isn't useful, they can then take the decision to spend no further time on developing it. This helps them to build the right product.
• Improved Productivity and Efficiency: Significant time savings for developers, testers, operations engineers, etc. through automation.
• Reliable Releases: The risks associated with a release have significantly decreased, and the release process has become more reliable. With continuous delivery, the deployment process and scripts are tested repeatedly before deployment to production. With more frequent releases, the number of code changes in each release decreases. This makes finding and fixing any problems that do occur easier, reducing the time in which they have an impact.
• Improved Product Quality: The number of open bugs and production incidents has decreased significantly.
• Improved Customer Satisfaction: A higher level of customer satisfaction is achieved.

A straightforward and repeatable deployment process, which minimises the risk of releasing faulty software, is vital for continuous delivery. Continuous delivery is based on the notion of a deployment pipeline, which is analogous to a conveyor belt that includes a set of validations through which a piece of software must pass on its way to be released.

Every time a new release is planned, all software and systems changes are verified, using a mix of automated and manual functional testing, security testing, and business ‘user acceptance’ testing. Only once these validations have been positively confirmed as meeting the set quality criteria is the new software version permitted to be released.

As a world class banking product organisation, Capital International Bank fully supports continuous delivery but with some further controls added to the process which ensure the integrity of the product within a highly regulated market. Capital’s continuous delivery capabilities have been established around a number of investments designed to ensure the company’s future success:

• Full Control and Accountability: All releases follow a formally defined ‘pipeline’, which is enforced by tools that allow any change to be tracked through several validation phases. This allows all constituent parts of a release to be version controlled and allows releases to be managed in production and in-life.
• Feature Team Organisation Design: Our delivery organisation is modelled around the so called ‘Spotify’ structure in which teams are aligned to specific product features (e.g. payments). This creates a sense of ownership and a deeper understanding of the customer requirements than if delivery tasks are being continually spread across a wider team.  
• Automated Code Quality Analysis: All software updates created by Capital’s development team are analysed using a state-of-the-art tool which is used widely by other leading organisations. This uses machine learning techniques to automatically identify potential security vulnerabilities, poor production standards and levels of maintainability.
• Services Based Architecture: Breaking a system into a number of independent microservices can increase a software system's ‘deployability’. The Bank system is broken down into several subcomponents, which can be updated independently with some elements being released with zero downtime.
• High Levels of Test Automation: We have invested heavily in test automation; this runs every day for the most critical areas of the software to ensure that we have confidence in the integrity of each release.
• ‘Live Like’ Environments: Different environments used in development, testing and production can result in undetected issues slipping to the production environment. We have created a ‘life like’ staging environment – which replicates production as closely as possible – so that each software version can be validated end-to-end before release.
• Customer Feedback Monitoring: The business has created a ‘Voice of the Customer’ team as a forum for gathering customer suggestions and analysing data to help us understand where the product can be improved.
  

So how is this Working at Capital? ‍

Capital International Bank was born on 1st December 2020 with the first release of the new banking product. At this time, the product was hidden from public view whilst a period of commissioning took place in which Capital International Group companies used the bank for live testing within terms agreed by the regulator.

In the six months leading up to this first launch milestone, the newly created Capital delivery organisation was releasing internal updates every two weeks and this bi-weekly release cadence became the natural ‘heartbeat’ of the organisation. In unregulated markets such as retail, many larger companies release changes daily. Our decision was to establish a slow natural cadence to our updates but within a process that supports daily releases if ever required by the business. Immediately after our first ‘hidden’ launch, we started using analytics and direct feedback to influence our product development roadmap and priorities. Daily reviews between business, product, operations and technology stakeholders allowed us to understand how the bank was being used and decisions were taken quickly if improvements were needed.

Following a soft launch on 1st March in which a customer facing version of the bank was released, our natural bi-weekly cycle was cut in half. For a period, we then ran a cycle of weekly scheduled updates allowing us to directly respond to customer feedback.

Following the excitement of the initial soft launch phase and after proving that our delivery capabilities could support daily and weekly releases as needed, the team settled back into bi-weekly sprints. The clients of Capital International Bank can expect new features to be introduced on a monthly basis, with any emerging friction points being resolved bi-weekly and critical issues being solved on a daily basis if needed. The investment in a continuous delivery capability stands us in good stead to support a customer obsessed culture in which the business can respond quickly to the needs of our clients. ‍

Disclaimer: The views, thoughts and opinions expressed within this article are those of the author, and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.